South Korea's Ministry of Economy and Finance announced a proposed revision to the Foreign Exchange Transactions Act on October 7, 2026. The rules require cross-border virtual-asset transfers to be reported to the Bank of Korea starting December 3, 2026. The collected data will be shared with tax and financial regulators to curb illegal transactions. Operators must meet strict registration requirements, and violators face a one-strike-out registration revocation.
Reporting and sharing of cross-border transfer data
- ▪Virtual-asset transfer data compiled by the Bank of Korea will be shared with the National Tax Service, the Korea Customs Service, the Financial Supervisory Service, and the Financial Intelligence Unit of South Korea.
- ▪South Korea's Ministry of Economy and Finance announced on October 7, 2026, a proposed revision to the Foreign Exchange Transactions Act requiring cross-border virtual-asset transfers to be reported to the Bank of Korea's foreign-exchange computer network.
- ▪The South Korean data-sharing framework aims to bring cross-border cryptocurrency transfers occurring outside traditional financial institutions into the government's official foreign-exchange oversight system.
- ▪The South Korean reporting requirement covers virtual-asset transfers between domestic and overseas virtual-asset service providers, as well as transfers between domestic operators and personal wallets.
Registration requirements for virtual-asset transfer operators
- ▪The proposed South Korean revision to the Foreign Exchange Transactions Act specifies the scope of a newly introduced business category called 'virtual asset transfer services' and sets out registration requirements for operators.
- ▪Under the proposed South Korean regulations, virtual-asset transfer operators must establish necessary computer systems and employ at least two professionals with relevant training or two years of foreign-exchange work experience.
Expanded enforcement and inspection powers
- ▪The proposed South Korean regulations expand the Korea Customs Service's inspection scope, allowing the agency to inspect related transactions without a separate procedure if violations are found during import and export deal inspections.
- ▪South Korea's proposed rules introduce a 'one-strike-out' penalty that allows authorities to revoke the registration of money changers who violate foreign-exchange rules in connection with voice phishing, illegal trade payments, or unlicensed remittances.
Timeline for the proposed regulatory changes
- ▪The revised enforcement decree of the Foreign Exchange Transactions Act is scheduled to take effect in South Korea on December 3, 2026.
- ▪The South Korean government will accept public comments on the proposed enforcement decree revision through October 26, 2026, before it undergoes regulatory and legislative reviews.
Debatable claims
- ▪South Korea should subject cross-border cryptocurrency transfers to foreign-exchange reporting requirements
- ▪South Korea's multi-agency crypto data-sharing framework compromises user privacy
- ▪South Korea's 'one-strike-out' penalty for foreign-exchange violations is disproportionate
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