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South Korea may let fintech firms handle crypto transfers
South Korea may let fintech firms, not just exchanges, apply for a new cross-border crypto transfer license launching in December. The Bank of Korea said it does not need to restrict the business to existing VASPs.
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South Korea is weighing whether to let fintech companies, not just cryptocurrency exchanges, apply for a new license to handle cross-border digital asset transfers. The regime takes effect in December.
Officials from multiple government agencies and industry participants told local media that authorities have started drafting enforcement rules for amendments to the Foreign Exchange Transactions Act. The revisions will define who can register to operate virtual asset transfer services.
The government promulgated the revised law on June 2 after cabinet approval. A six-month grace period means the rules kick in this December.
Under the new framework, cross-border transfers involving virtual assets become a regulated foreign exchange activity. Companies must register with the Ministry of Economy and Finance and report overseas transfers through the Bank of Korea's foreign exchange reporting network.
Authorities have argued that cross-border crypto transactions previously sat outside the country's foreign exchange oversight, creating risks around illicit flows and money laundering. The revised framework brings them under formal supervision.
Applicants must complete Virtual Asset Service Provider registration, connect their systems to institutions that relay foreign exchange and digital asset transaction data, and meet additional requirements on facilities and professional staff. Those details will be set by presidential decree.
Current VASP rules limit eligible firms largely to crypto exchanges and certain custodians registered with the Financial Intelligence Unit under the Financial Services Commission. Industry participants had expected the new regime to be dominated by major domestic exchanges such as Upbit and Bithumb.
Government officials are now reviewing whether registration should extend beyond exchanges to fintech companies capable of handling cross-border virtual asset transfers.