The South Korean government plans to regulate cross-border transactions of virtual assets, such as cryptocurrencies, The Korea Times reported. The proposed regulation will introduce new registration and reporting requirements for involved parties from the second half of 2025.
New Regulations Incoming
Although details of the proposed regulations are yet to be disclosed, the Finance Ministry stated today (Friday) that the new regulatory framework will require prior registration and monthly transaction reporting to the Bank of Korea for all business dealings involving cross-border trade of virtual assets.
Despite the Finance Ministry’s proposal, lawmakers have yet to complete the necessary legislative requirements.
Although South Korea is a small country, it has adopted cryptocurrencies, which have also introduced the risk of financial crimes. According to the local customs agency, authorities detected a total of 11 trillion won ($7.97 billion) in foreign exchange-related crimes since 2020, 81.3 percent of which involved virtual assets.
The Race to Regulate Crypto
Earlier this year, a new Virtual Asset User Protection Act became effective in the country, introducing stringent regulations to prevent unfair trading practices in the crypto market. The legislation requires crypto exchanges to establish strong monitoring mechanisms to detect and report suspicious activities to financial authorities. It specifically prohibits the use of insider information, market price manipulation, and fraudulent transactions.
Meanwhile, the European Union leads in crypto regulation. The bloc introduced the Markets in Crypto-Assets Regulation (MiCA), part of which became effective earlier this year, covering the circulation of stablecoins. The remaining part of MiCA, which covers due diligence for crypto transactions, will become effective at the end of 2024.
However, the US, which has the largest economy, has yet to decide on a clear stance toward crypto. Interestingly, cryptocurrency has become a prominent topic in the ongoing presidential election campaign. While Donald Trump has openly supported crypto by attending Bitcoin conferences and launching his own non-fungible tokens (NFTs), Kamala Harris has mentioned crypto only once so far, in a Wall Street fundraiser, where she pledged to encourage investment in “digital assets” alongside other modern technologies like artificial intelligence (AI).
This article was written by Arnab Shome at www.financemagnates.com.
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