South Korean authorities have announced their plan to fully regulate cross-border cryptocurrency transactions by the end of 2025 to combat the “blind spot” that enables foreign exchanges to evade taxes.
Quranic authorities regulate cross-border cryptocurrency transactions
According to local media Edaily, South Korean Deputy Prime Minister (DPM) Choi Sang-mook subscriber The country’s plan to regulate cross-border cryptocurrency transactions at the Group of 20 (G20) meeting in Washington.
Choi revealed that the Korean government plans to create a legal basis for authorities supervising foreign stock exchanges to monitor these transactions and share them with the relevant financial authorities.
Starting next year, Korean authorities will set new definitions for “virtual assets” and “virtual asset operators” in the Foreign Transaction Law. These definitions “will define virtual assets as a ‘third type’ not included in foreign exchange or offshore payment instruments,” Choi explained on Thursday. or capital transactions.
As a result, cryptocurrency deposits and withdrawals made by foreign operators, clients and personal wallets will be defined as a “cross-border cryptocurrency transaction.” In addition, companies handling cross-border transactions involving crypto assets must register with Korean financial authorities and report transaction details to the Bank of Korea monthly.
Choi noted that the information collected will also be shared with the National Tax Service, the Korean Customs Service, financial authorities and international financial centers to monitor illegal transactions for statistics, analysis and research purposes.
Korea’s growing demand for cross-border transactions
At the G20 meeting, South Korea’s director of project management explained that the new regulatory plan comes amid an increase in cross-border cryptocurrency transactions. Choi revealed that the recent rise is due to the popularity of stablecoins, as they can be used for cross-border transactions and payments “just like real foreign exchanges.”
However, the high demand for cross-border transactions using crypto assets cannot be verified and regulated, as there is no legal basis for crypto assets in the Foreign Exchange Transaction Law.
Recently, stablecoin listings on local exchanges have increased, and daily trading volume has already exceeded 300 billion won this year, compared to 191 billion won last year. Cross-border transactions involving virtual assets are increasing, but their legal nature has not yet been agreed upon.
This created a “blind spot” that was allegedly exploited to conduct illegal activities, hide criminal proceeds, and tax evasion. According to the report, the National Tax Service and the Korean Customs Service rely on case-by-case requests or seizure orders to obtain information about cross-border cryptocurrency transactions.
The South Korean Ministry of Economy and Finance plans to complete the review of the Foreign Exchange Transaction Law and related laws in the first half of next year. Authorities reportedly expect to formally implement the monitoring system by the second half of 2025.
“Whether or not to formally integrate virtual assets into the system, such as using them as a trading instrument for commercial transactions or capital other than the monitoring system, will be discussed in the ‘Virtual Assets Committee’ that will be launched next month under the leadership of the Financial Services Commission, and the Ministry will participate.” also”.
Total crypto market capitalization is at $2.27 trillion in the weekly chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, chart from TradingView.com
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