South Korea tightens rules on overseas crypto transfers

South Korea has passed a new amendment to the Foreign Exchange Transactions Act, tightening control over companies that move crypto assets overseas. 

The revised law will require firms handling cross-border virtual asset transfers to register with the finance minister.

The rule covers businesses that move virtual assets between South Korea and foreign countries through sale, purchase, or exchange. Crypto exchanges, custody firms, and other transfer service providers fall under the new registration scope.

New bill creates transfer business category

The amendment creates a new legal category called a “virtual-asset transfer service.” This gives authorities a clearer way to track firms that support overseas crypto transfers, including stablecoin movements.

The government plans to bring these transfers into the foreign-exchange oversight system. Rep. Lim I-ja, chair of the National Assembly’s Strategy and Finance Committee, said the measure aims to build a virtual-asset monitoring system and support a sound foreign-exchange trading market.

Additionally, the new bill comes as South Korea prepares broader crypto compliance rules. Local industry groups have raised concerns about planned Travel Rule changes, including the removal of the current 1 million won threshold.

Under the current system, the Travel Rule applies to crypto transfers above 1 million won. Industry groups warned that wider checks could add delays, create return issues, and expose users to losses when prices move during verification.

Crypto tax deadline adds pressure

Related coverage also reported that South Korea plans to tax virtual asset gains from Jan. 1, 2027. Gains above 2.5 million won will face a combined 22% tax, made up of 20% income tax and 2% local income tax.

The National Tax Service is preparing guidance with major local exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax. The first full filing period for affected investors is expected in May 2028, covering income earned in 2027.

South Korea has been moving toward cross-border crypto controls for more than a year. Reuters reported in 2024 that the finance ministry planned registration and monthly reporting rules for businesses handling overseas virtual asset trade.