The Bank of Korea will begin receiving transaction-by-transaction reports from domestic virtual asset service providers on crypto transfers to overseas exchanges and other destinations starting in December. The central bank is building a reporting system that allows it to directly track cross-border virtual asset transfers through its foreign exchange computer network. It is, however, considering easing the standards and scope for month-end balance reporting in light of the reporting burden on operators.
According to the Bank of Korea's "Manual on Foreign Exchange Computer Network Reporting for Virtual Currency Transfer Operators," obtained by the office of Rep. Park Soo-young of the People Power Party on the 23rd, virtual currency operators must report outflows and inflows of virtual currency completed each day to the central bank by 11 a.m. the following business day, beginning Dec. 3. Transactions on weekends and public holidays may be submitted together on the next business day.
Items to be reported include the date and time of the transaction, the type and quantity of virtual currency, the won-converted amount, fees, and information on senders and recipients. Typical cases include buying bitcoin on a domestic exchange and sending it to an overseas exchange, or transferring assets from a domestic operator to a personal wallet. Transactions sent directly between personal wallets without going through an operator, by contrast, are not subject to reporting.
The new system stems from a revision of the Foreign Exchange Transactions Act requiring the Bank of Korea to collect records of cross-border virtual currency transfers through its foreign exchange computer network. As the central institution for foreign exchange information, the central bank will receive the relevant data and monitor cross-border movements of funds and virtual currency. This means transfer records can be tracked systematically from a foreign exchange standpoint, separately from the existing anti-money laundering and oversight framework run by financial regulators.
Virtual currency operators must also file monthly reports on each user's month-end holdings, won-converted balances and inflows and outflows during the month. The deadline is 5:30 p.m. on the 10th day of the following month. The manual stipulates that dormant accounts, delisted virtual currencies and staked assets are also subject to balance reporting.
The targets and scope of month-end balance reporting, however, may be adjusted. The Bank of Korea initially drew up a plan to collect balance reports from any user with at least one cross-border transfer on record since July 19, 2024, even if that user made no transactions during the month in question. According to Park's office, 1,272,878 users at the country's five largest exchanges had a record of cross-border virtual currency transfers between July 19, 2024, and Sept. 30 of this year.
"Some operators say they face technical difficulties and staffing shortages in applying this retroactively from July 2024," a senior Bank of Korea official said. "We are considering easing the rule so that it applies from Dec. 3, the date the law takes effect." The official added that the central bank is "reviewing the matter openly, including a plan to significantly narrow the scope of balance reporting."
The Bank of Korea is also considering differentiating the reporting burden according to the size of operators and their transaction volumes. "We need to consider whether applying the same reporting standards to large exchanges with active trading and to small operators with almost no trading is equivalent in terms of the effectiveness of monitoring," the official said.
The central bank plans to finalize the content and scope of the reporting requirements in November, after consultations with the Ministry of Finance and Economy and other relevant agencies as well as virtual currency operators.