Last updated on January 13th, 2025 at 06:06 am
South Korea is taking steps to tighten its monitoring of cross-border cryptocurrency transactions in order to prevent tax evasion and address foreign exchange crimes. Finance Minister Choi Sang-Mok revealed this at a G20 meeting in Washington.
According to a report from local news outlet Edaily, Choi stated that the country plans to introduce a reporting mandate for businesses involved in cross-border crypto transactions. He explained,
“We will promote preemptive monitoring of virtual asset transactions used for tax evasion and currency manipulation across borders.”
The new regulations will require businesses handling cross-border crypto transfers to pre-register with the authorities and report monthly transaction details to the Bank of Korea. Choi highlighted that cross-border crypto transactions currently exist as a regulatory “blind spot” for South Korea’s tax and customs agencies, creating opportunities for criminals to hide illicit gains.
To close this gap, the government will amend the Foreign Exchange Transactions Act to introduce distinct definitions for “virtual assets” and “virtual asset business operators.” This will allow South Korea to classify virtual assets as a separate category from traditional foreign exchange or capital transactions, enabling better oversight and regulatory consistency.
The Finance Ministry aims to finalize these legal adjustments by mid-2025, with reporting mandates expected to take effect by the second quarter.
Meanwhile, Choi’s comments follow a recent report which revealed that the South Korean finance ministry is weighing foreign exchange controls on stablecoins due to concerns about their use in cross-border transactions. A legal framework for South Korean Won-pegged stablecoins will be developed first, before expanding to stablecoins tied to foreign currencies. The country’s top regulator, the Financial Services Commission (FSC), will reportedly follow examples from Japan and the European Union to shape the framework.
These measures underscore South Korea’s commitment to safeguarding its financial ecosystem while allowing the crypto sector to grow responsibly. Over 34,000 users reportedly have unclaimed assets totalling 17.8 billion won (around $13 million) stuck in over a dozen South Korean cryptocurrency exchanges that have halted operations in 2024 so far.
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