December 04, 2024

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Finance Minister Choi Sang-mok speaks at a press event held in Washington, Friday. (The Ministry of Finance and Economy)

The Korean government is to tighten the monitoring of cross-border trading of virtual assets, including cryptocurrency, through a revised law set for enactment by the latter half of 2025.

"The government will push for the revision of the Foreign Exchange Transactions Act related to virtual assets through discussions with relevant departments and legislation, with the aim to implement the changed measures within the latter half of next year,” Finance Minister Choi Sang-mok said at a press event held in Washington, Friday on the sidelines of the Group of 20 Finance Ministers and Central Bank Governors Meeting.

According to the ministry, as the cross-border trading of virtual assets increases, illegal transactions, including those with the purpose of tax evasion and money laundering, have also been on the rise.

Foreign exchange-related crimes totaling 11 trillion won ($8 billion) took place from 2020 to July, according to the Korea Customs Service. Of the amount, those involving virtual assets were worth 9 trillion won, or around 80 percent.

“(Currently,) the National Tax Service and the Korea Customs Service have to make requests case by case or execute a warrant to look into virtual asset transactions,” the ministry explained, citing the lack of a monitoring system for virtual assets.

Under the new regulations, virtual asset service providers, including crypto exchanges, will be required to register with authorities beforehand to conduct cross-border trading of virtual assets, the ministry said.

They will also be mandated to report their transactions to the Bank of Korea on a monthly basis. The central bank, along with the Finance Ministry, is in charge of overseeing foreign exchange transactions.

The date, amount, type and information on the sender and receiver of a transaction are likely to be included in the report. The transaction records are to be provided to related authorities for the monitoring of illegal transactions, as well as for statistics and analysis.

“This does not mean Korea will institutionalize the cross-border trading of virtual assets,” Choi said. “It is about building up a system to monitor actual transactions.”

Further details regarding the institutionalization of virtual assets will be discussed through the Virtual Asset Committee. The committee is to be launched under the Financial Service Commission in November.

By Im Eun-byel (silverstar@heraldcorp.com)