South Korea is responding to the growing threat of virtual assets being used as channels for illegal cross-border financial activities. The Customs Service, in collaboration with National Assembly member Choi Ki-sang, organized a policy seminar to address the misuse of cryptocurrencies in transnational crimes. The seminar, titled ‘Transnational Crime and Virtual Assets: Responding to Cross-Border Illegal Fund Flows,’ aimed to explore policy and institutional improvements for monitoring and regulating virtual asset transactions. The increasing anonymity and convenience of crypto transfers have made them attractive for illicit activities, prompting calls for more robust oversight.
The policy changes impact financial regulators, law enforcement agencies, crypto industry participants, and the general public. Over the past five years, the Korea Customs Service has detected illegal foreign exchange transactions using virtual assets totaling KRW 13.7368 trillion. In 2025 alone, illegal crypto transaction volumes were estimated at over USD 154 billion, a 162% increase from the previous year, according to Chainalysis. The seminar featured presentations and discussions from legal, academic, industry, and government experts, highlighting the urgent need for concrete monitoring measures and regulatory frameworks.
The seminar took place on February 5, 2026, at the National Assembly Members’ Hall, with participation from key stakeholders. Choi Ki-sang has already proposed amendments to the Foreign Exchange Transactions Act in October 2025, aiming to introduce a management system for virtual assets similar to foreign currency controls. The proposed changes would require reporting and oversight of stablecoins used for overseas payments and remittances. Implementation will involve collaboration among government agencies, industry leaders, and legal experts to ensure effective enforcement and compliance.
Frequently asked questions include: What are the main types of illegal crypto transactions identified? Experts highlighted organized money laundering and offshore asset concealment as key threats. How will the new regulations affect crypto users and businesses? The proposed amendments will require stricter reporting and monitoring of cross-border crypto payments, impacting both individuals and companies. What steps should stakeholders take now? Industry participants should prepare for enhanced compliance requirements and stay informed about regulatory developments.
Metaqsol opinion: South Korea’s policy response to the misuse of virtual assets in transnational crime is timely and data-driven. The significant rise in illegal crypto transactions, as evidenced by a 162% year-on-year increase, highlights the need for robust monitoring and regulatory frameworks. The involvement of diverse experts and the proposal to amend the Foreign Exchange Transactions Act demonstrate a comprehensive approach. Effective collaboration and implementation will be essential to safeguard the financial system and ensure safe, transparent virtual asset transactions.