South Korea passes amended Foreign Exchange Act — crypto overseas-transfer firms must register with MoF

South Korea's National Assembly passed an amendment to the Foreign Exchange Transactions Act on May 8, 2026, mandating that businesses providing overseas cryptocurrency transfer services register with the Ministry of Economy and Finance (MoEF). Operators lacking registration will be treated as illegal after the law takes effect.

Under the current framework, domestic exchanges could transfer virtual assets overseas without additional regulatory registration. The amended act changes that: any business converting Korean won into crypto and facilitating crypto cross-border transfers must now obtain MoEF registration before operating. Detailed requirements and compliance obligations will be set out in enforcement decrees.

Industry participants view the amendment as the second wave of tightening after the Virtual Asset User Protection Act, which entered into force in 2024. The regulation raises dual concerns: potential restrictions on global arbitrage flows, and hopes that formal institutional recognition will draw more institutional capital into the Korean crypto market.

From a regulatory standpoint, the primary goals are anti-money laundering (AML) compliance and tax enforcement — consistent with the expanded scope of the Financial Intelligence Unit (FIU) under the Specific Financial Information Act.

Key items to watch: the enforcement decree publication timeline, grace periods for existing operators, and how foreign exchanges will adapt their South Korea market access strategies. If KRW-exit channels tighten, the premium of Korean crypto prices over global benchmarks — the so-called "Kimchi Premium" — could widen.

Not investment advice. Verify all figures with primary sources before acting.