South Korea plans to impose reporting mandate for 'cross-border' crypto transactions: report

South Korea plans to ramp up regulation over cross-border transactions using cryptocurrencies to curb foreign exchange crime involving digital assets, the country’s Minister of Economy and Finance Choi Sang-mok announced at a G20 meeting in Washington on Thursday, according to South Korean news reports.

Choi said that businesses that handle "cross-border transactions" of stablecoins and other cryptocurrencies will be required to pre-register with the authorities, as well as report details of such transactions to the Bank of Korea on a monthly basis, Edaily reported . 

The reported transaction data will be monitored by South Korea’s tax, customs, financial and international finance regulatory bodies to track illegal transactions and use for research. 

According to the Korea Customs Service , around 88% of foreign exchange crimes, valued at 1.65 trillion won ($1.2 billion), had been involved with cryptocurrencies. Such crimes include illegal arbitrage and money laundering.

To establish the legal basis for the planned new mandates, Choi reportedly said that the ministry will amend the Foreign Exchange Transactions Act to define “virtual assets” and “virtual asset business operators” in a new category, separate from foreign exchange, means of overseas payment, or capital transactions.

The minister said he expects the legal revisions to be finalized by the first half of 2025, with the reporting and monitoring system officially launching in the second half.

The Ministry of Economy and Finance did not immediately respond to The Block's request for further comment.

Ongoing efforts

South Korea has been working to establish a comprehensive regulatory framework around its digital asset sector, with the first set of rules focused on investor protection coming into effect in July this year.

The country intends to push out follow-up regulations that would establish standards for crypto issuance, distribution and disclosures.

South Korea’s top financial watchdog is also in the process of reevaluating its ban on local spot cryptocurrency exchange-traded funds and institutional accounts on crypto exchanges, in a bid to expand its currently retail-focused crypto sector.