South Korea tightens control over outbound crypto transfers

Key points:

• Crypto companies will be required to register for international transfers.
• Stablecoins and custody services will fall under stricter oversight.
• Authorities aim to significantly improve monitoring of digital asset flows.

South Korea’s parliament has passed amendments to the Foreign Exchange Transactions Act that significantly tighten control over cross-border crypto transfers. Companies involved in sending or receiving digital assets from abroad will now be required to register with the Minister of Economy and Finance.

The new rules introduce a specific definition for cross-border crypto asset transfers, covering buying, selling, exchanging, and moving cryptocurrencies between South Korea and other countries.

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What changes for crypto businesses

The law will apply to crypto exchanges, custody services, and any other companies involved in storing or transferring digital assets. The government expects this will enable systematic tracking of crypto flows across borders and strengthen oversight of financial movements.

Special attention is being paid to stablecoins. Authorities have explicitly stated that cross-border transactions involving stablecoins will also be subject to foreign exchange controls, alongside traditional fiat currencies.

The amendments also increase penalties for violations of foreign exchange laws. If transactions are deemed aimed at illegal gains, penalties can include up to one year in prison or fines of up to 100 million KRW.

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Additional control measures

In addition to cryptocurrencies, the law updates rules for currency exchange operators and international payment providers. The government will have the power to revoke registrations from companies that have effectively ceased operations or violated licensing conditions.

South Korean financial regulators have been steadily ramping up oversight of the crypto market in recent months. Earlier, the Financial Services Commission announced the expansion of the Travel Rule to all crypto transactions, while tax authorities confirmed plans to introduce a 22% capital gains tax on crypto profits exceeding 2.5 million KRW starting January 2027.