【In-Depth Analysis】South Korea’s Cryptocurrency Regulation Enters the Data-Driven Era
From the perspective of institutional design, the amendment to the Foreign Exchange Transactions Act recently announced by the Bank of Korea has a clear focus on compliance. The law will take effect on December 3, and its core mechanism requires domestic virtual asset service providers to establish a comprehensive system for reporting cross-border transactions.
At the operational level, there are three key requirements: first, a timing requirement—service providers must report each transaction individually by 11 a.m. on the next business day after completing a cross-border transfer of crypto assets; second, reporting details, including the transaction time, currency and amount, equivalent value in Korean won, fees, and complete information about both the sender and recipient; and third, a monthly reporting obligation—providers must submit an FX1021 report by 5:30 p.m. on the 10th of the following month, covering all holdings, including dormant accounts, delisted currencies, and staked assets.
Notably, the regulatory scope has a clear boundary: direct transfers between personal wallets are excluded. The lookback period begins on July 19, 2024, the effective date of the Virtual Asset User Protection Act, and identifies users with at least one recorded cross-border transfer. According to data from the five major exchanges, the total number of users affected is 1,272,878.
The data-sharing framework shows that the Bank of Korea is establishing coordination channels with the National Tax Service, Korea Customs Service, Financial Supervisory Service, and Korea Financial Intelligence Unit. The central bank is currently discussing extending the lookback period to December 3, with the final scope to be confirmed in November. This policy framework reflects regulators’ approach of closely monitoring cross-border flows of crypto assets and provides an opportunity to assess future compliance costs.
From the perspective of institutional design, the amendment to the Foreign Exchange Transactions Act recently announced by the Bank of Korea has a clear focus on compliance. The law will take effect on December 3, and its core mechanism requires domestic virtual asset service providers to establish a comprehensive system for reporting cross-border transactions.
At the operational level, there are three key requirements: first, a timing requirement—service providers must report each transaction individually by 11 a.m. on the next business day after completing a cross-border transfer of crypto assets; second, reporting details, including the transaction time, currency and amount, equivalent value in Korean won, fees, and complete information about both the sender and recipient; and third, a monthly reporting obligation—providers must submit an FX1021 report by 5:30 p.m. on the 10th of the following month, covering all holdings, including dormant accounts, delisted currencies, and staked assets.
Notably, the regulatory scope has a clear boundary: direct transfers between personal wallets are excluded. The lookback period begins on July 19, 2024, the effective date of the Virtual Asset User Protection Act, and identifies users with at least one recorded cross-border transfer. According to data from the five major exchanges, the total number of users affected is 1,272,878.
The data-sharing framework shows that the Bank of Korea is establishing coordination channels with the National Tax Service, Korea Customs Service, Financial Supervisory Service, and Korea Financial Intelligence Unit. The central bank is currently discussing extending the lookback period to December 3, with the final scope to be confirmed in November. This policy framework reflects regulators’ approach of closely monitoring cross-border flows of crypto assets and provides an opportunity to assess future compliance costs.
