South Korea passed a law requiring firms handling cross-border crypto transfers to register with the government.
South Korea's National Assembly passed an amendment to the Foreign Exchange Transactions Act during a plenary session on May 8, introducing a registration requirement for businesses that move crypto assets across borders.
Under the new rules, any entity transferring cryptocurrency to or from overseas as a business must register with the Minister of Economy and Finance. The amendment formally defines a "virtual asset transfer business" as one that conducts cross-border transfers through the sale, purchase, or exchange of crypto assets, covering exchanges and digital asset custody providers.
The South Korean government said it intends to use the legal update to monitor cross-border crypto flows in a more systematic manner. The legislation follows a broader push by South Korean authorities to tighten oversight of the domestic crypto sector.
The Financial Services Commission, South Korea's top financial regulator, recently announced plans to expand Travel Rule requirements to all crypto transactions. Current rules only mandate the collection of sender and recipient data for transfers above 1 million won ($681). Industry participants have reportedly pushed back, arguing the expanded rule could slow transaction processing and generate losses in volatile market conditions.
South Korea's tax authorities separately confirmed that a 22% capital gains tax on crypto profits exceeding 2.5 million won ($1,703) will take effect from January 2027 as planned. The crypto tax has been delayed several times amid ongoing debate, with critics arguing that the country's tax infrastructure and regulatory framework are not yet prepared to support enforcement.
The layering of the cross-border registration requirement, the expanded Travel Rule, and the approaching tax deadline reflects a broader regulatory shift in South Korea toward structured oversight of crypto activity, both domestically and internationally.
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