Virtual Assets Abused for Crime…Cross-Border Transactions to Be Monitored

Virtual Assets Abused for Crime…Cross-Border Transactions to Be Monitored

Revision of Foreign Exchange Transactions Act…Vice Minister Heo Jang Reviews Progress of MSCI Developed Markets Index Inclusion

Amid growing concerns that virtual assets are being misused as a channel for illegal money transfers, authorities will monitor cross-border transactions.

According to the Ministry of Economy and Finance, Vice Minister Heo Jang held a meeting of the 'Foreign Exchange Soundness Council and Morgan Stanley Capital International (MSCI) Developed Markets Index Inclusion Promotion Task Force (TF)' at the Bank Hall in Jung-gu, Seoul, on the 21st, discussing the revised Foreign Exchange Transactions Act, which includes these plans, with attendees.

The revised law stipulates that information related to cross-border transfers of virtual assets must be reported through the Bank of Korea's foreign exchange computer network. The information collected this way will be shared with the National Tax Service, Korea Customs Service, Financial Supervisory Service, and Korea Financial Intelligence Unit (FIU).

Currently, even if virtual assets cross borders, their amounts are not strictly regulated like foreign currency.

However, a government official stated that in the long term, institutional reforms will be pursued based on monitored information to prevent virtual assets from being exploited for crime or used as a means to leak national wealth.

Vice Minister Heo urged close cooperation from the industry and relevant institutions, such as the Bank of Korea, in the process of establishing a system to monitor cross-border transfers of virtual assets.

The new law was passed at a plenary session of the National Assembly on the 7th of this month. It is expected to take effect around the end of the year after undergoing procedures such as deliberation and resolution by the State Council.

At the meeting attended by officials from the Ministry of Economy and Finance, the Bank of Korea, the Financial Services Commission, the Financial Supervisory Service, the Korea Exchange, and the Korea Securities Depository, Vice Minister Heo reviewed the implementation status of the 'Comprehensive Roadmap for Foreign Exchange and Capital Market for MSCI Developed Markets Index Inclusion' announced in January.

Out of 39 tasks in 8 major areas, 25 have been completed, and an additional 3 will be completed by June, bringing the total to 28 by the first half of the year.