South Korean authorities are preparing to regulate cross-border digital asset transactions from the end of 2025, according to an October 25 report from Reuters.
The Ministry of Finance announced that the new regulations will require registration and reporting for companies in Korea involved in cross-border crypto trading.
Under this framework, Korea-based companies that facilitate cross-border digital asset transactions must pre-register with regulatory authorities and submit monthly transaction reports to the Bank of Korea. This requirement allows South Korean authorities to closely monitor these transactions to prevent and address crypto-related illegal activities.
The proposed framework also aims to further define the country’s virtual assets and virtual asset activities. This new classification will distinguish digital assets from traditional currency and cross-border payment systems, creating a separate regulatory category.
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 managers’ 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.”
Korea Customs data shows that the country has recorded nearly 11 trillion won (about $8 billion) in foreign exchange volume that it attributed to crime, with 81.3%, or 9 trillion (equivalent to $6.48 billion) of these cases are related to cryptocurrencies. .
This development forms the basis for the government’s desire to protect its foreign exchange market from illegal crypto activities.
Pending the legislative process, the regulation is expected to enter into force in the second half of 2025.
In recent years, South Korea has been gradually working towards a comprehensive regulatory framework for its digital assets industry.
This has led to the implementation of several initiatives and regulations, including the Virtual Asset User Protection Act, which mandates strict compliance and regular reviews of the emerging industry. It has also led to many investors having their cryptocurrencies frozen on exchanges, without access to their funds.