New South Korean Regulation Requires Reporting of Cross-Border Crypto Transfers Starting December 3

The amendment to South Korea's Foreign Exchange Transaction Act will take effect on December 3. Domestic virtual asset service providers must report cross-border transfers of crypto assets on a per-transaction basis by 11 a.m. on the next business day after the transaction is completed. This includes information such as transaction time, type and amount of currency, equivalent amount in Korean won, transaction fees, and details of both sending and receiving parties. Additionally, service providers are required to submit a monthly balance report (FX1021) by 5:30 p.m. on the 10th of the following month, detailing each user's end-of-month holdings, equivalent balances in Korean won, and total cross-border inflows and outflows for the month, including dormant accounts, delisted currencies, and staked assets. Direct transfers between personal wallets are not included in the reporting requirements. The retrospective scope is based on users who have at least one record of cross-border transfer since the Virtual Asset User Protection Act came into effect on July 19, 2024, affecting a total of 1,272,878 individuals across five major exchanges. The Bank of Korea stated that the data will be shared with the National Tax Service, Customs Service, Financial Supervisory Service, and Financial Intelligence Analysis Institute, and is considering extending the retrospective start date to December 3, with the final scope to be determined in November.

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