1.

Introduction of Mandatory Registration for Virtual Asset Transfer Businesses and Establishment of Monitoring Framework

Under the amended FETA, any person intending to engage in a virtual asset transfer business must register with the Ministry of Finance and Economy (the “MOFE”). “Virtual asset transfer business” is a newly established concept under the amended FETA, referring to (i) the business of facilitating the transfer of virtual assets by virtual asset service providers (“VASPs”) between Korea and foreign jurisdictions through the sale, purchase or exchange of virtual assets, or other actions prescribed by the Enforcement Decree to the FETA, and (ii) other actions producing substantially the same effect, as prescribed by the Enforcement Decree to the FETA.

To register as a virtual asset transfer business operator, applicants must have (i) completed their VASP report filing requirement pursuant to Article 7(1) of the Act on Reporting and Using Specified Financial Transaction Information, (ii) connected their computer network with the foreign exchange concentration agency (Bank of Korea), and (iii) satisfied other requirements prescribed by the Enforcement Decree to the FETA, including those relating to facilities and professional personnel.

Once registered, VASPs will be subject to regulations comparable to those currently applicable to foreign exchange agencies under the FETA. Specifically, they will be required to (i) comply with requests for data and information and inspections by the Minister of MOFE, and (ii) file prior notifications in the event of changes to registered matters or the cessation of business. Furthermore, the MOFE has established an inter-agency information-sharing framework, under which data relating to virtual asset transfers may be communicated—either directly or through the Bank of Korea—to the Financial Services Commission, National Tax Service, Korea Customs Service, Financial Supervisory Service and Export-Import Bank of Korea.

However, key details of the registration requirements have been delegated to the Enforcement Decree to the FETA. These include defining the scope of “transfer of virtual assets between Korea and foreign jurisdictions” and “actions producing the same effect in substance as virtual asset transfers” that trigger the registration obligation, as well as the facilities and professional personnel requirements. Accordingly, further developments in the relevant subordinate legislation should be closely followed.
 

2.

Restructuring of Specialized Foreign Exchange Business Categories and Establishment of Grounds for Registration Revocation

Previously, specialized foreign exchange businesses were categorized into (i) currency exchange businesses, (ii) small-amount overseas remittance businesses, and (iii) other specialized foreign exchange businesses. The amended FETA recategorizes them into (i) general currency exchange businesses, and (ii) overseas payment and settlement businesses. Under this recategorization, small-amount overseas remittance businesses and other specialized foreign exchange businesses fall within the category of overseas payment and settlement business, defined as the business of “payment, receipt, and settlement for transactions between Korea and foreign jurisdictions, as well as purchase or sale of foreign currency, through electronic means.”

Under the previous regime, the specific scope (e.g., scale, method) and safety standards were prescribed by the Enforcement Decree to the FETA only for currency exchange businesses and small-amount overseas remittance businesses. The amended FETA extends this delegation to all specialized foreign exchange businesses (i.e., general currency exchange businesses and overseas payment and settlement businesses) which include “other specialized foreign exchange businesses.” Accordingly, it is expected that the specific business scope and operating standards for overseas payment and settlement businesses will be determined through future amendments to subordinate legislation.

The current FETA lacks an explicit legal basis for imposing administrative dispositions—such as registration revocation or business suspension—on specialized foreign exchange business operators who conducted foreign exchange business in violation of the prescribed business scope. The amended FETA addresses this gap by introducing an explicit legal basis for registration revocation, full or partial business suspension, or penalty surcharges in lieu thereof, in cases of “conducting foreign exchange business in violation of Article 8(3) of the FETA.” This enables administrative dispositions against specialized foreign exchange business operators for violations of the prescribed business scope.

In addition, pursuant to the Addenda of the amended FETA, specialized foreign exchange business operators who have registered under the previous provisions prior to enforcement of the amended FETA will be deemed to have registered under the amended FETA, and thus are not required to undergo a new registration procedure.
 

3.

Strengthening of Sanctions for Payment Procedure Violations

The amended FETA strengthens existing provisions that impose administrative fines of up to KRW 50 million on persons who paid, received, or transferred funds in violation of prescribed payment procedures such as currency exchange procedures, remittance procedures, and property transfer procedures. Specifically, where such violations are committed for the purpose of unlawfully obtaining property or pecuniary benefits, or causing a third party to do so, imprisonment of up to one year or a fine of up to KRW 100 million may be imposed under the amended FETA. Given that such violations, which previously resulted only in administrative fines, may result in criminal offenses, parties engaging in related transactions should exercise heightened diligence to ensure strict compliance with prescribed payment procedures and other requirements under the amended FETA.
 

4.

Revision of Definition of Capital Transactions

The FETA currently excludes expenses necessary for maintaining overseas branches from the definition of capital transactions while including them in overseas direct investment, a concept that is subsumed under capital transactions—resulting in a systematic inconsistency. Under the amended FETA, expenses necessary for maintaining overseas branches are no longer excluded from the definition of capital transactions.
 

5.

Overhaul of Objection Procedures for Macroprudential Stability Levies and Establishment of Statute of Limitations

In line with the General Act on Public Administration, financial companies that have received a notice of payment for macroprudential stability levies may now file an objection within 30 days from the date of receipt of such notice, and the Minister of MOFE is required to process the objection and notify the results thereof within 14 days from the receipt of the objection. Additionally, in accordance with the government’s Plan for Reorganization and Strengthening of the Management Framework for Levies (March 2024), a statute of limitations provision for macroprudential stability levies that are imposed on non-deposit foreign currency liabilities will be determined by Presidential Decree within a maximum limit of ten years.

The amended FETA is expected to take effect on December 3, 2026, with related amendments to subordinate legislation including the Enforcement Decree of the FETA also expected to take place ahead of its implementation.