The Ministry of Economy and Finance has established a new system for monitoring cross-border transfers of virtual assets, while also revising registration requirements for foreign exchange businesses and currency exchange operations. This initiative aims to enhance the management framework for foreign exchange transactions in response to the growing use of virtual assets and new forms of overseas payment and settlement services.
On October 7, the ministry announced a legislative notice for a partial amendment to the Foreign Exchange Transaction Act enforcement decree. This amendment specifies the delegation of authority outlined in the revised Foreign Exchange Transaction Act, which was amended on June 2. The public comment period for the legislative notice runs from today until October 26. The amendment is set to take effect on December 3, coinciding with the implementation of the law.
The amendment introduces a new category called 'virtual asset transfer business' to manage cross-border transfers of virtual assets. This applies not only to transfers between domestic virtual asset operators and foreign entities but also to transfers between domestic operators and individual wallets. To register as a virtual asset transfer operator, businesses must have at least two qualified personnel with experience in foreign exchange operations or relevant training.
Virtual asset transfer operators are required to report transfer records to the Bank of Korea's foreign exchange network, which will share this information with the National Tax Service, the Korea Customs Service, the Financial Supervisory Service, and the Financial Intelligence Unit (FIU). The ministry believes this will help prevent circumvention of foreign exchange regulations and illegal transactions involving virtual assets.
The ministry will also restructure fintech-based foreign exchange operations. The small overseas remittance business and other specialized foreign exchange operations will be consolidated into an overseas payment and settlement business, which will include six categories: small overseas remittance, electronic payment agency, electronic currency, and prepaid services.
Following the confirmation of the enforcement decree, the ministry plans to amend foreign exchange transaction regulations to allow the transfer of foreign prepaid payment instruments to others within a specified monetary limit. This aims to institutionalize the Travel Wallet case, which was operated under a financial regulatory sandbox.
New registration requirements will also be introduced for currency exchange businesses. Executives must not have disqualifying factors under the Financial Holding Company Act, and the minimum capital requirement will be set at 10 million won. Among the 1,346 currency exchange companies that reported their performance in the first half of this year, 581 had no foreign exchange purchase records.
Violations related to voice phishing, illegal trade payments, and remittances involving virtual assets may lead to the cancellation of registrations. Additionally, the upper limit for fines in lieu of business suspension will increase from the current 20%, 40%, 50%, and 70% to 40%, 60%, 80%, and 100%, depending on the duration of the business suspension.
The Korea Customs Service's authority to inspect foreign exchange transactions will also be expanded. If violations related to service or capital transactions are detected during import and export inspections, the customs service will be able to continue inspections on the parties involved in those transactions. This measure aims to reduce administrative costs and delays caused by inter-agency referrals.
The deadline for filing objections to foreign exchange soundness burden fees will be extended from 15 days to 30 days, while the notification period for processing results will be shortened from 15 days to 14 days. The duration of the burden fee will be set at 10 years.
After gathering public feedback, the Ministry of Economy and Finance plans to proceed with regulatory reviews, legal reviews, and discussions at the vice-ministerial and cabinet meetings before implementing the amendments on December 3.
* This article has been translated by AI.
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