South Korean authorities are gearing up to regulate cross-border digital asset transactions starting in late 2025, as reported by Reuters on October 25. The Ministry of Finance has announced that new regulations will be put in place to require registration and reporting for businesses in Korea involved in cross-border crypto trades.
Under the upcoming framework, companies in Korea facilitating digital asset transactions across borders will need to pre-register with regulatory bodies and submit monthly transaction reports to the Bank of Korea. This measure is intended to allow South Korean authorities to closely monitor these transactions in order to prevent and address any crypto-related illegal activities.
The proposed regulation also aims to provide a clearer definition of the country’s virtual assets and virtual asset businesses. This new classification will differentiate digital assets from traditional foreign exchange and cross-border payment systems, creating a distinct regulatory category.
Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok has stated, “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 revealed that the country has seen nearly 11 trillion won (approximately $8 billion) in foreign exchange volume associated with criminal activities, with a significant portion—81.3% or 9 trillion won (equivalent to $6.48 billion)—linked to cryptocurrencies. This data underscores the government’s aim to safeguard its foreign exchange market from illicit crypto activities.
The regulation is expected to come into effect in the second half of 2025 pending the legislative process. In recent years, South Korea has been working towards establishing a comprehensive regulatory framework for its digital asset industry. This effort has led to the implementation of various initiatives and regulations, including the Virtual Asset User Protection Act, which mandates strict compliance and regular assessments of the emerging industry. However, it has also resulted in some investors experiencing issues with frozen crypto on exchanges and being unable to access their funds.
As the country continues to refine its regulatory environment for digital assets, it is clear that South Korea is committed to ensuring a secure and transparent ecosystem for crypto transactions.