South Korea announces new regulations for cross-border cryptocurrency transactions to combat forex crimes and enhance consumer protection in the digital asset market.
South Korea is taking significant steps to regulate cross-border cryptocurrency transactions. The country’s Minister of Economy and Finance, Choi Sang-mok, announced these plans during Thursday’s G20 meeting in Washington. This move aims to curb foreign exchange crimes linked to digital assets.
Choi pointed out that companies that engage in cross-border transactions in stablecoins and other cryptos must register with the government in advance. Further, these firms must provide monthly details of every transaction to the Bank of Korea. This new requirement is to help increase the level of transparency and accountability of the cryptocurrency market.
Several South Korean regulatory authorities—tax revenue, customs, financial, and international finance agencies—will analyze the information obtained from such transactions. They intend to monitor the illicit business and use the information as a reference.
South Korea Strengthens Crypto Regulations to Protect Consumers
The data from the Korea Customs Service presented below shows a disturbing picture. About 88% of forex crimes, including about $1.2bn or 1.65 trillion won, have involved cryptocurrency. Surprisingly, these crimes often involve arbitrage and money laundering, hence the need for increased regulatory compliance.
Regarding this regulatory framework, Choi said that ‘’the ministry is keen on revising the Foreign Exchange Transactions Act. This amendment will introduce new legal terms, “virtual assets” and “virtual asset business operators.” As a result, these entities will be classified under a different group from the foreign exchange and overseas payment procedures.
The government of South Korea is interested in creating a distinct legal framework for regulating cryptocurrencies. This step is one of the measures aimed at preventing financial offenses and increasing the protection of financial transactions. South Korea aims to protect virtual currency consumers and firms from fraudsters through these measures.
More regulations are emerging as many countries face similar challenges. The cryptocurrency market is still evolving. As it grows, governments recognize the need for robust regulatory frameworks. South Korea’s action plan could serve as a model for other nations. This approach may help address common issues in the digital asset space. It emphasizes the importance of effective regulation in fostering a secure environment for cryptocurrencies.
Lastly, South Korea’s proposals convey its interest in allowing cryptos to be used without undermining the financial sector. The upcoming regulatory changes are expected to play a crucial role in shaping the future of digital assets in the country.
