South Korea has enacted a new amendment to the Foreign Exchange Transactions Act, introducing mandatory registration for virtual asset businesses handling overseas transfers. The bill, passed by the National Assembly, marks a significant escalation in the country’s oversight of cross-border cryptocurrency activity.
Under the new framework, any firm transferring cryptocurrencies between South Korea and other nations—including exchanges and custody providers—must now register with the Ministry of Economy and Finance and comply with strict reporting and monitoring obligations overseen by the Financial Intelligence Unit (FIU). The definition covers cross-border purchases, sales, and exchanges of virtual assets, placing these activities under the same scrutiny as traditional financial institutions.
Authorities aim to combat money laundering, capital flight, and illicit transactions by enforcing stronger compliance systems, transaction monitoring, and customer verification procedures. The law also revises the foreign exchange burden system, introduces a 10-year cap on certain charges, tightens rules for dormant money exchange houses, and allows license revocation for non-compliant operators.
In addition, South Korea confirmed its crypto tax policy: starting January 1, 2027, investors must pay a total tax rate of 22% (20% national, 2% local) on annual crypto profits exceeding 2.5 million won. Penalties for illegal foreign exchange activities have been sharply increased—offenders can face up to one year in prison and fines of up to 100 million won.
Financial and Economic Planning Commission Chairman Limja stated the law aims to create a “healthier foreign exchange system” with enhanced monitoring and clear operating limits. While the regulations may increase operational costs and reduce settlement speed, they could also boost institutional confidence by reducing legal uncertainty. The move aligns with global trends, as regulators in the US, EU, and Singapore similarly tighten controls on cross-border crypto payments.
