South Korea’s Ministry of Economy and Finance has proposed implementing rules for monitoring cross-border virtual asset transfers and overhauling the regulation of fintech foreign exchange services, currency exchange businesses and related inspections. The draft would establish registration and reporting requirements for virtual asset transfer businesses, consolidate fintech services under a new overseas payment and settlement business framework, and strengthen controls intended to reduce gaps in the detection of illegal foreign exchange transactions. The virtual asset regime would cover transfers between domestic and overseas virtual asset service providers and between domestic providers and personal wallets. Registered businesses would need specified IT systems and at least two qualified personnel, and would report transfer records to the Bank of Korea’s foreign exchange information network for sharing with tax, customs, financial supervisory and financial intelligence authorities. The proposal would also combine small-value overseas remittance and other specialized foreign exchange activities into six overseas payment and settlement categories, including two new categories for payment escrow and electronic billing and payment services. The Financial Supervisory Service would conduct inspections and the Financial Services Commission would oversee the sector. Currency exchange businesses would become subject to management eligibility and minimum capital requirements, including capital of at least KRW 10 million or a higher amount set by the ministry. Registration could be canceled after a single violation involving activities such as voice phishing, illegal trade payments or unauthorized remittances linked to virtual assets, while penalties in lieu of suspension could reach 100% of gains for violations warranting a four-month suspension. The proposal would also allow the Korea Customs Service to continue investigating service and capital transaction violations discovered during trade inspections. The revised rules are expected to take effect on Dec. 3, 2026, alongside the amended Foreign Exchange Transactions Act.
South Korea’s Ministry of Economy and Finance launches consultation on cross-border virtual asset monitoring and tighter nonbank foreign exchange oversight
South Korea’s Ministry of Economy and Finance has proposed registration and reporting rules for cross-border virtual asset transfers and a consolidated regulatory framework for fintech-based overseas payments. The draft also tightens entry requirements and sanctions for currency exchange businesses and expands the Korea Customs Service’s inspection authority. The changes are expected to take effect on Dec. 3, 2026.