South Korea has enacted a pivotal regulatory shift, implementing stringent new reporting requirements for foreign property investors that specifically target cryptocurrency proceeds. The rules, announced by the Financial Services Commission (FSC), take effect on February 10, 2025, and represent the country's most aggressive effort to date to regulate digital asset flows within its real estate market.
The amended Foreign Exchange Transactions Regulations, published on January 15, 2025, significantly broaden anti-money laundering (AML) protocols. Foreign nationals must now submit a detailed Fund Procurement Plan when purchasing domestic real estate exceeding 100 million KRW (approx. $75,000). This form includes a dedicated section requiring verified documentation for cryptocurrency sale proceeds, including transaction records from registered Virtual Asset Service Providers (VASPs).
The regulatory expansion directly addresses concerns over opaque capital inflows. Data from 2024 showed a 34% year-over-year increase in foreign investment in Seoul's luxury apartment market, alongside a 210% surge in suspicious transaction reports involving virtual assets and real estate. The FSC specifically referenced the 2022 Terra-Luna collapse as a catalyst for this enhanced oversight.
Non-compliance carries severe penalties, including fines of up to 30% of the transaction value for incomplete disclosures and potential criminal charges for intentional misrepresentation. The National Tax Service has gained expanded audit authority for all foreign property transactions.
In a related development for 2026, the Financial Supervisory Service (FSS) has released a work plan to crack down on crypto market abuse. The plan focuses on faster investigations into suspicious trading, including monitoring whale trades, coordinated pump-and-dump schemes, and social media rumors. This action follows an incident where exchange Bithumb mistakenly distributed 620,000 bitcoins to users, triggering a market probe.
A key component of the 2026 plan is the rollout of AI-based monitoring systems designed to detect abnormal price spikes and linked wallet activity within minutes. Furthermore, a dedicated task group has been formed to prepare the framework for the upcoming Digital Asset Basic Act, focusing on token issuance disclosures, trading transparency, and licensing guides.
