In response to rising incidents of illicit foreign exchange activities tied to digital assets, South Korea has announced plans to establish a virtual asset transaction monitoring system by the second half of 2025. Deputy Prime Minister and Finance Minister Choi Sang-mok, during the G20 Finance Ministers’ Meeting, underscored the need for stricter oversight amid increasing cases of corporate tax evasion, money laundering, and illegal gambling transactions involving stablecoins, Business Korea reported.
With cross-border stablecoin transactions growing, the government will now require companies engaged in international virtual asset trade to register with authorities and submit monthly transaction reports to the Bank of Korea. The mandate aims to curb financial misconduct linked to digital assets.
South Korea Calls for Virtual Asset Law to Address Cross-Border Crypto Crime
Minister Choi pointed out the challenges in regulating cross-border stablecoin transactions due to the absence of a foundational virtual asset law. He noted, “Given the increasing suspicious cases of tax evasion and money laundering for drugs and gambling in recent cross-border transactions, we intend to amend the Foreign Exchange Transactions Act to provide a regulatory basis.”
The country’s customs agency reports that since 2020, virtual assets were involved in 81.3% of South Korea’s 11 trillion won ($7.97 billion) in foreign exchange crimes, highlighting the pressing need for these new regulations.
South Korea Solidifies Its Position as a Leading Crypto Hub in 2024
In 2024, South Korea has become one of the top three crypto-friendly locations globally. With the Virtual Asset User Protection Act in effect, South Korea now mandates crypto companies to register with the Financial Services Commission (FSC), ensuring greater transparency and regulatory oversight. As a result, several unregistered exchanges have been shut down, enabling customers to reclaim $12.8 million in stranded investments.
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