South Korea Tightens Control Over Overseas Crypto Transfers

South Korea has approved new rules that place cross-border cryptocurrency transfers under direct government oversight. Lawmakers passed revisions to the Foreign Exchange Transactions Act this week as regulators move to tighten monitoring of digital asset flows leaving and entering the country. Officials said the changes aim to improve transparency as stablecoins and other cryptocurrencies gain wider use in international payments.

As per a local report, under the revised law, companies handling overseas crypto transfers must register with the Minister of Economy and Finance before starting operations. The government also expanded the definition of virtual asset transfer services to include cross-border trading and exchange activities. As a result, domestic crypto exchanges and custody firms will now fall under stricter reporting and compliance requirements.

Government expands crypto monitoring framework

South Korean lawmakers pushed for the changes after growing criticism that older foreign exchange laws could no longer keep up with crypto trading activity. Officials said regulators faced difficulties tracking digital asset transfers moving across borders. As a result, authorities now plan to introduce a separate monitoring system for cryptocurrency and stablecoin transactions tied to foreign exchange activity.

The amendment combines proposals from lawmakers across both major political parties. At the same time, regulators continue discussions with local exchanges over additional compliance requirements. The Financial Intelligence Unit said it plans to meet with domestic crypto platforms after the legislative notice period ends on May 11, 2026.

An FIU official said regulators want rules “that the industry can comply with and accept.” The agency also said it will work directly with exchanges to address concerns surrounding reporting obligations and enforcement measures.

Regulatory pressure builds on exchanges

The tougher regulatory push comes as South Korean authorities increase scrutiny on domestic crypto exchanges. Earlier this month, the Financial Intelligence Unit fined Bithumb 36.8 billion won, or about $27 million, over alleged violations of financial regulations. Regulators also ordered a six-month partial suspension that targeted services for new customers.

However, the Seoul Administrative Court temporarily blocked the sanctions after Bithumb challenged the decision. The ruling allowed the exchange to continue operating normally while the legal case moves forward.

On the other hand, South Korea also announced that it would introduce a tax on crypto gains starting January 1, 2027. Any profits earned exceeding 2.5 million won will be taxed at a rate of 22%. Additionally, the tax agency will collect data from popular crypto exchanges such as Upbit, Bithumb, and Korbit.

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