On October 7, the Ministry of Finance and Economy (MOFE) will announce a proposed amendment to the Enforcement Decree of the Foreign Exchange Transactions Act for public comment, pursuant to Article 41 of the Administrative Procedures Act. The proposed amendment is intended to set out detailed provisions in subordinate regulations to implement the amendment to the Foreign Exchange Transactions Act (June 2, 2026), concerning the monitoring of cross-border virtual asset transfers, while also minimizing blind spots in illegal foreign exchange (FX) transactions.
First, the proposed amendment specifies the definition of the newly established virtual asset transfer business for the monitoring of cross-border virtual asset transfers and sets out registration requirements and procedures as well as reporting obligations. The virtual asset transfer business will cover transfers of virtual assets between domestic and overseas virtual asset service providers, as well as transfers between domestic virtual asset service providers and personal wallets.
The proposed amendment also specifies facility and professional staffing requirements for registration as a virtual asset transfer business and establishes registration procedures, including matters subject to registration and notification of changes. Virtual asset transfer service providers will be required to report information on virtual asset transfers to the FX information concentration agency (the Bank of Korea’s FX Information System). The information will be shared with and utilized by the National Tax Service, Korea Customs Service, Financial Supervisory Service and Financial Intelligence Unit.
With the establishment of an integrated monitoring framework for information on cross-border virtual asset transfers, the amendment is expected to enhance the soundness of FX transactions by helping prevent the circumvention of FX regulations and illegal transactions involving virtual assets.
Second, the proposed amendment integrates the fintech-based small-sum overseas remittance business and other specialized FX businesses into a new overseas payment and settlement business, while comprehensively restructuring their scope of business and registration requirements. The overseas payment and settlement business will comprise six business categories: the small-sum overseas remittance business; three existing categories under other specialized FX business – electronic payment settlement agency services, issuance and management of electronic currency and issuance of management of prepaid electronic payment means – as well as two newly established categories reflecting market demand: overseas escrow services and overseas electronic bill presentment and payment (EBPP) services. The inspection and supervisory framework will also be reorganized, including through the delegation of inspection responsibilities to the Financial Supervisory Service and supervisory responsibilities to the Financial Services Commission.
The definitions of the five business categories other than the small-sum overseas remittance business will follow those under the Electronic Financial Transactions Act. With regard to prepaid electronic payment means, following finalization of the Enforcement Decree, the government plans to amend the Foreign Exchange Transactions Regulations to allow foreign-currency prepaid payment instruments to be transferred to third parties up to a certain amount, thereby institutionalizing practices tested under the financial regulatory sandbox (e.g., Travel Wallet).
Third, the proposed amendment introduces personnel and capital requirements for registration as a money-changing business and strengthens sanctions for violations. Unlike other non-bank business categories, money-changing businesses currently have no entry requirements, which has led to a proliferation of business with little or no business activity. Concerns have also been raised, including by the National Assembly, that sanctions, including penalty surcharges, are too low relative to the severity of violations and therefore lack effectiveness.
To address these issues, the proposed amendment establishes personnel and capital requirements for registration as a money-changing business and provides for a one-strike cancellation of registration for violations involving voice phishing, illegal trade payments or unauthorized remittances related to virtual assets.
It also raises the maximum penalty surcharge imposed in lieu of business suspension to 100% of the gains obtained from the violation in cases corresponding to a four-month business suspension. These measures are expected to establish sound business practices in the money-changing sector and minimize blind spots in illegal FX transactions.
Fourth, the proposed amendment partially expands the inspection authority of the Korea Customs Service over FX transactions. As FX transactions have become increasingly complex, concerns have been raised that ambiguity over jurisdiction among inspection authorities, administrative costs arising from case transfers and delays in inspections have reduced inspection efficiency. The proposed amendment will therefore allow the Korea Customs Service to continue its inspections when it identifies violations involving service or capital transactions in the course of inspecting import and export transactions.
Lastly, the proposed amendment will also make necessary revisions to provisions of the Enforcement Decree in line with the amendment to the Foreign Exchange Transactions Act, including adjustments to the period for filing objections regarding the macroprudential stability levy (from 15 days to within 30 days) and the period for notification of the outcome (from 15 days to within 14 days), as well as the introduction of a 10-year validity period.
The proposed amendments will be implemented in line with the effective date of the amended Foreign Exchange Transactions Act on December 3, 2026, following the collection of public comments from October 7 to October 26, 2026, and subsequent procedures, including regulatory review by the Office for Government Policy Coordination, review by the Ministry of Government Legislation, and deliberations by the Vice Ministers’ Meeting and the Cabinet.
Please refer to the attache files.
