- South Korea passed a new law requiring crypto firms handling overseas transfers to register with authorities
- The government aims to improve monitoring of cross-border crypto flows
- Regulators are also expanding Travel Rule requirements across all crypto transactions
- South Korea plans to begin taxing crypto gains at 22% starting in 2027
South Korea Expands Crypto Oversight
South Korea’s National Assembly has approved a new amendment to the Foreign Exchange Transactions Act that increases government oversight of businesses moving cryptocurrency in and out of the country.
Under the new rules, companies that transfer crypto assets overseas as part of their business operations will soon be required to register with the country’s Minister of Economy and Finance.
The measure is part of a broader effort by South Korean regulators to tighten supervision of the digital asset sector as crypto adoption continues to grow across the country.
Who Will Be Affected By The New Rules
The amendment introduces a formal definition for “virtual asset transfer businesses.” This category includes crypto exchanges, custody firms, and other companies that facilitate the buying, selling, exchanging, or transferring of crypto assets across borders.
By requiring registration, authorities aim to build a more structured system for tracking international crypto flows and identifying potential risks tied to money laundering, sanctions evasion, or unreported capital movement.
South Korea has become one of the world’s most active crypto trading markets, making cross-border transfers an increasingly important issue for regulators.
Travel Rule Requirements Are Also Expanding
The country’s Financial Services Commission recently announced plans to strengthen implementation of the Travel Rule, which currently applies only to transfers above 1 million won, or roughly $680.
The updated approach would extend identity verification requirements to all crypto transactions, regardless of transfer size.
Under Travel Rule regulations, crypto platforms must collect and share sender and recipient information during transfers between exchanges and financial institutions.
Authorities argue the expanded rules are necessary to improve transparency and reduce financial crime risks within the crypto sector.
Industry Pushback Continues
Local crypto companies have reportedly criticized the stricter regulations, warning that additional compliance requirements could slow transaction speeds and create operational burdens during highly volatile market conditions.
Critics also argue that South Korea is moving aggressively on regulation before fully building the infrastructure needed to support large-scale compliance.
At the same time, the country is preparing to introduce a long-delayed crypto tax framework. South Korean tax authorities recently confirmed that a 22% tax on crypto gains above 2.5 million won, or around $1,700, will officially begin in January 2027 after multiple postponements.
The government believes the combination of tighter oversight, stronger reporting standards, and taxation rules will help integrate crypto more fully into the country’s regulated financial system.
