South Korean authorities have announced plans to regulate cross-border digital asset transactions by 2025. The Ministry of Finance stated that businesses in Korea involved in such trades will need to register and report their activities. Companies facilitating these transactions must pre-register with regulatory bodies and submit monthly reports to the Bank of Korea to prevent illegal activities related to crypto.
The new regulations will also define virtual assets and virtual asset businesses in a separate category from traditional foreign exchange and cross-border payment systems. Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok explained that virtual assets will be classified as a “third type” outside the scope of current regulations.
The decision to regulate cross-border crypto trading comes after data from the Korea Customs Service revealed that a significant portion of foreign exchange crimes in the country, amounting to nearly $8 billion, were linked to crypto. The government aims to protect its foreign exchange market from illicit activities through these regulations.
The new framework is expected to be implemented in the second half of 2025 pending the legislative process. South Korea has been working towards a comprehensive regulatory framework for the digital asset industry, including the Virtual Asset User Protection Act. However, some investors have faced issues with frozen assets on exchanges, highlighting the need for stricter compliance and regulations in the industry.
