South Korean authorities are preparing to regulate cross-border digital asset transactions starting in late 2025, according to an October 25 Reuters report.
The Ministry of Finance announced that the new regulations will require registration and reporting of Korean companies involved in cross-border crypto trading.
Under this, Korea-based companies that facilitate cross-border digital asset transactions must pre-register with regulators and submit monthly transaction reports to the Bank of Korea. This requirement allows South Korean authorities to closely monitor these transactions in order to prevent and combat illegal crypto-related activities.
The proposed framework also aims to more precisely define the country’s virtual assets and virtual asset activities. This new classification will distinguish digital assets from traditional foreign exchange 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 operators” in the Foreign Exchange Transactions Law. With this separate definition, virtual assets will be classified as a “third type”, outside the scope of foreign exchange operations, payment instruments or capital transactions.
Data from the Korean Customs Service shows the country recorded nearly 11 trillion won (about $8 billion) in foreign exchange volumes that it attributed to crime, with 81.3 percent, or 9 trillion (equivalent to $6.48 billion) of these crypto-related cases. .
This development explains the government’s desire to protect its foreign exchange market against illicit crypto activities.
Pending the legislative process, the regulation is expected to enter into force in the second half of 2025.
Over the past few years, South Korea has gradually worked to develop a comprehensive regulatory framework for its digital assets sector.
This has led to the implementation of several initiatives and regulations, including the Virtual Asset User Protection Act, which mandates strict compliance and regular assessments of the emerging sector. This has also led many investors to freeze cryptocurrencies on exchanges without access to their funds.
