Cross-border virtual asset transactions must be reported from December…Strengthening soundness of foreign exchange transactions

Cross-border virtual asset transactions must be reported from December…Strengthening soundness of foreign exchange transactions

Revised Foreign Exchange Transactions Act to be promulgated next month…Pre-registration with the Minister of Economy and Finance, then reported to the Bank of Korea

Shared with the National Tax Service, Korea Customs Service, Financial Supervisory Service, and FIU for use in illegal transaction investigations

From the end of the year, if you want to transfer virtual assets across borders, you must report the details to the authorities.

The Ministry of Economy and Finance announced that the promulgation draft of the revised Foreign Exchange Transactions Act, which imposes a pre-registration obligation on virtual asset service providers (hereinafter 'virtual asset transfer operators') that conduct cross-border virtual asset transfer business, was approved at a Cabinet meeting on the 26th. The revised law is scheduled to be promulgated on the 2nd of next month and will take effect six months later, in early December.

Virtual asset transfer operators must pre-register with the Minister of Economy and Finance to trade virtual assets across borders, and must report cross-border virtual asset transfer details to the Bank of Korea's foreign exchange computer network.

This information will be shared with the National Tax Service, Korea Customs Service, Financial Supervisory Service, and the Financial Intelligence Unit (FIU) and will be used for investigations into illegal transactions.

Failure to register or non-compliance with reporting and inspection will result in sanctions similar to those imposed on existing foreign exchange business institutions.

The Ministry of Economy and Finance stated that with the revision of the Foreign Exchange Transactions Act, the foundation has been laid to establish an integrated monitoring system for cross-border virtual asset inflows and outflows.

Related authorities plan to cooperate in processes such as revising enforcement decrees to ensure the smooth operation of information collection, sharing, and ex-post investigation systems.

The revision of the Foreign Exchange Transactions Act was promoted to ensure the soundness of foreign exchange transactions amidst the recent spread of cross-border transactions using virtual assets, which has led to an increase in foreign exchange regulation circumvention or illegal transactions.