Korea Expands Digital Asset Oversight with Fintech Firm Inclusion

South Korea is considering expanding its licensing regime for cross-border digital asset transfers to include fintech firms, in addition to cryptocurrency exchanges. The move aims to bring virtual asset transactions under formal supervision and reporting requirements.

The government has begun drafting enforcement regulations for amendments to the Foreign Exchange Transactions Act, which will take effect in December. Companies that wish to provide cross-border transfer services must register with the Ministry of Economy and Finance and report overseas transfer transactions through the Bank of Korea's foreign exchange reporting network.

Industry participants had expected the new regime to be dominated by major domestic exchanges like Upbit and Bithumb, but government officials are reviewing whether registration should extend beyond exchanges to fintech companies capable of handling cross-border virtual asset transfers.

A Bank of Korea official stated that authorities do not necessarily need to restrict the business to existing Virtual Asset Service Providers (VASPs) if other entities can perform transfer services. The official added that businesses seeking to engage in virtual asset transfer activities may still need foreign exchange-related registration under applicable regulations.