South Korean authorities announced their plan to fully regulate cross-border crypto transactions by the end of 2025 to combat a “blind spot” enabling tax evasion by foreign exchanges.

Koran Authorities To Regulate Cross-Border Crypto Transactions

According to local news media outlet Edaily, South Korea’s Deputy Prime Minister (DPM) Choi Sang-mok shared the country’s plan to regulate cross-border crypto transactions at a Group of 20 (G20) meeting in Washington.

Choi revealed that the Korean government plans to create a legal basis for authorities overseeing foreign exchanges to monitor these transactions and share them with the pertinent financial authorities.

Starting next year, Korean authorities will create new definitions of “virtual assets” and virtual asset operators” in the Foreign Transaction Act. These definitions will “define virtual assets as a ‘third type’ that is not included in foreign exchange, external payment instruments, or capital transactions,” Choi explained on Thursday.

As a result, crypto deposits and withdrawals made by foreign operators, customers, and personal wallets will be defined as a “cross-border crypto transaction.” Additionally, companies that handle cross-border transactions involving crypto assets must register with Korean financial authorities and report transaction details to the Bank of Korea monthly.

Choi noted the information collected would also be shared with the National Tax Service, Korea Customs Service, financial authorities, and international financial centers to monitor illegal transactions for statistics, analysis, and research.

Korea’s Increasing Demand For Cross-Border Transactions

At the G20 meeting, the South Korean DPM explained that the new regulatory plan comes amid an increase in cross-border crypto transactions. Choi revealed that the recent surge is due to stablecoins popularity, as it can be used for cross-border transactions and payments “just like real foreign exchanges.”

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Author: Rubmar Garcia