Key Points:
- South Korea to mandate registration and monthly reporting for crypto.
- New rules on cross-border crypto trades expected by late 2025.
- Stringent anti-money laundering laws already in place in South Korea.
- EU leads in crypto regulation; U.S. stance remains uncertain.
South Korea Moves Toward Cross-Border Crypto Regulation
South Korea tightens control over crypto transactions.
— TU_Crypto_News (@TU_Crypto_News) October 25, 2024
South Korea plans to implement strict oversight of cryptocurrency transactions to combat tax evasion and currency-related crimes.
This was announced by Finance Minister Choe Sang Mok at the G20 meeting.
Now, any… pic.twitter.com/XtrJgFNq1W
South Korea is preparing new regulations for cross-border cryptocurrency transactions, adding to its growing oversight of digital assets. Announced by the Ministry of Finance, the proposed legislation will require all entities involved in cross-border crypto dealings to register and submit monthly transaction reports to the Bank of Korea. This law, aimed at mitigating financial crime risks tied to virtual assets, is expected to take effect in the latter half of 2025, as reported by The Korea Times. However, lawmakers are still in the process of finalizing the necessary legal frameworks.
The Finance Ministry emphasized that these controls are part of broader efforts to manage and regulate cryptocurrency-related activities within the country’s borders. With South Korea being one of the most active cryptocurrency markets globally, authorities are responding to mounting concerns about financial crimes facilitated by digital assets. According to the Korean Customs Service, virtual assets were implicated in over 11 trillion won ($7.97 billion) in foreign exchange crimes since 2020, accounting for 81.3% of such cases.
Rising Trend of Global Crypto Regulation
This proposed regulation builds on South Korea’s recent Virtual Asset User Protection Act, which took effect earlier this year. The Act mandates comprehensive monitoring by crypto exchanges to detect and report suspicious activities to regulatory bodies. It also strictly prohibits practices like insider trading, market manipulation, and fraud within the cryptocurrency market. These steps reflect South Korea’s efforts to establish a secure environment for virtual asset trading, as the nation takes its place among countries implementing strict crypto regulations.
Globally, other regions are making similar strides. The European Union (EU) has set a precedent with its Markets in Crypto-Assets (MiCA) Regulation, the first comprehensive set of digital asset laws in the world. Effective since early 2024, MiCA covers various aspects of crypto asset issuance and trading, particularly around stablecoins. An additional segment of MiCA addressing transaction due diligence will come into force by the end of 2024, positioning the EU as a leader in digital asset regulation.
In contrast, the United States has yet to establish a uniform regulatory approach to digital assets. The debate over how to handle crypto is becoming a prominent issue in the U.S. presidential race. While former President Donald Trump has shown explicit support for cryptocurrencies through attendance at Bitcoin events and launching his own NFTs, Vice President Kamala Harris has mentioned digital assets only briefly, promising to promote investments in advanced technologies like AI and blockchain.
South Korea’s impending regulations signify a cautious yet assertive approach to managing cryptocurrency’s risks. With cryptocurrency’s global popularity on the rise, many industry experts believe this growing regulatory landscape will provide greater security for investors while helping curb illicit activities across international borders.
