South Korea to tighten controls over cross-border cryptocurrency transactions
Date: 2024-10-25 Author: Gabriel Deangelo Categories: IN WORLD
At the G20 meeting in Washington, South Korean Finance Minister Choi Sang-mok announced his intention to introduce mandatory reporting for all companies that work with cryptocurrency transactions abroad. According to the minister, these measures will help ensure the monitoring of transactions with virtual assets used for tax evasion and currency manipulation.
Under the new rules, companies engaged in cryptocurrency transfers abroad will have to pre-register with regulators and report monthly to the Bank of Korea on their transactions. According to Choi, at the moment, cryptocurrency transfers are a "blind spot" for the country's tax and customs services, which is actively used by criminals to hide criminal proceeds and illegal transactions.
According to the Korea Customs Service, 81% of foreign exchange crimes since 2020, worth about $1.2 billion, involve digital assets. However, before the new rules can go into effect, a legal framework will need to be put in place.
Choi also said that the government will be drafting new definitions for “virtual assets” and “virtual asset operators” in the Foreign Exchange Law. Virtual assets will be a separate category from traditional foreign exchange, foreign payment, or capital transactions.
The revision is expected to be completed by mid-2025, with the new reporting requirements set to go into effect in the second quarter of this year.
South Korea has recently introduced a number of new regulations to protect the interests of cryptocurrency investors. The country has had a virtual asset protection law in place since July 19, requiring cryptocurrency service providers to follow strict rules to protect user funds.
According to these regulations, providers are required to insure themselves against hacker attacks, keep customer assets separate from the exchange tokens and place customer deposits in banks, as well as regularly review the listing of tokens on exchanges. In addition, the South Korean government intends to impose strict penalties for cryptocurrency crimes, including prison terms and fines of three to five times the amount of illegally obtained profits.
