The Republic of Korea's National Assembly passed a Partial Amendment to the Foreign Exchange Transactions Act at plenary session on 7 May 2026. The amendment is final at the legislative stage. Promulgation triggers a six-month grace period. The new rules take effect on the day after that period closes.
The amendment introduces a statutory definition of virtual asset transfer business. The new category captures any entity that sends or receives digital assets between South Korea and overseas. Operators must register with the Minister of Economy and Finance to handle cross-border transfers. Registrants must already hold status as a virtual asset service provider under the Act on Reporting and Use of Certain Financial Transaction Information. They must also maintain systems for transaction data relay, concentration, and exchange, plus links to relevant electronic networks. Stablecoins used in cross-border or foreign exchange transactions count as a means of payment under the act. Operating without registration carries a criminal penalty of up to three years in prison.
Korean and offshore crypto exchanges, custodians, payment service providers, OTC desks, and stablecoin issuers that move digital assets across the Korean border fall inside the new business category. They must run a registration process with the Ministry of Economy and Finance ahead of the effective date. Banks and brokerages with adjacent virtual asset products must check whether their internal flows trigger the new definition. Issuers of won-pegged or USD-pegged stablecoins targeting Korean users must plan for the means of payment classification and the associated reserve and redemption duties signalled in companion legislation.
The act creates a registration regime, not a licensing regime, so the Minister of Economy and Finance will set the form and content of the registration application by subordinate rules. Sanctions reach unauthorised currency swaps and arbitrage trading. The reach of the act to transactions that are substantially similar to virtual asset transfers raises open scope questions for foreign exchange officials and the industry. The amendment takes effect six months after promulgation, with a likely effective date in late 2026.
Licentium advises crypto, AI, and digital asset clients on cross-border crypto regulation in Asia, with a partner network for South Korean local counsel. Work we undertake includes registration mapping for the new virtual asset transfer business, stablecoin issuer regulatory diligence, foreign exchange compliance reviews, transaction monitoring redesign, and engagement with the Ministry of Economy and Finance. Contact us to scope your Korean exposure under the amendment.
Source: Republic of Korea, Bank of Korea, Foreign Exchange System: Legislation and Policy, confirming the Foreign Exchange Transactions Act regime amended at National Assembly plenary 7 May 2026, https://www.bok.or.kr/eng/main/contents.do?menuNo=400187
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