Regulation of Cross-Border Crypto Trades in South Korea Expected by 2025
According to a report by Reuters on Oct. 25, South Korean authorities are getting ready to regulate cross-border digital asset transactions by late 2025.
The Ministry of Finance disclosed that the upcoming regulations will mandate registration and reporting for businesses in Korea engaged in cross-border crypto trades.
Under this new system, Korean companies facilitating digital asset transactions across borders must pre-register with regulatory entities and submit monthly transaction reports to the Bank of Korea. This requirement will allow South Korean authorities to closely monitor these transactions to prevent and address any crypto-related illegal activities.
The proposed framework also seeks to clearly define the country’s virtual assets and virtual asset businesses, creating a separate regulatory category distinct from traditional foreign exchange and cross-border payment systems.
Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok reportedly explained: “We will establish new definitions of ‘virtual assets’ and ‘virtual asset operators’ in the Foreign Exchange Transactions Act. With this separate definition, virtual assets will be classified as a ‘third type,’ outside the scope of foreign exchange, payment instruments, or capital transactions.”
Data from the Korea Customs Service reveals that nearly 11 trillion won (approximately $8 billion) in foreign exchange volume has been attributed to criminal activities, with 81.3% of these cases (equivalent to $6.48 billion) linked to crypto.
This development underscores the government’s efforts to safeguard its foreign exchange market from illicit crypto activities.
Pending the completion of the legislative process, the regulation is set to take effect in the latter half of 2025.
In recent years, South Korea has been progressively establishing a comprehensive regulatory framework for its digital asset sector, implementing various initiatives and regulations such as the Virtual Asset User Protection Act, which requires strict compliance and regular evaluations of the growing industry. This has resulted in some investors having their crypto assets frozen on exchanges without access to their funds.
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