Regulatory Compliance and Guidelines for Establishing a Cryptocurrency Exchange Service for Foreigners Released

Cryptocurrency exchange centers, particularly those utilizing 'dollar stablecoins' to provide exchange services, are currently operating for foreigners under government regulatory sandbox approvals.

These services allow for a maximum exchange limit of USD 2,000 per person per day. In addition to currency exchange, they often provide accompanying functions such as card issuance. While these services offer convenience in converting virtual assets into cash, experts advise caution regarding potential risks associated with regulatory gray areas.

Korea Customs Service Guidance on Legal Classification

Regarding the establishment of such facilities, the Korea Customs Service provides the following interpretations based on current laws:

• Under the Foreign Exchange Transactions Act, 'currency exchange' refers to the purchase or sale of foreign currency or the purchase of foreign traveler's checks from a resident or non-resident in exchange for domestic means of payment.
• It is important to note that 'Virtual Currency' does not constitute a 'Means of Payment' under Article 3, Paragraph 1, Item 3 of the Foreign Exchange Transactions Act. Therefore, it is not subject to traditional currency exchange business regulations.
• However, this specific business model is classified as a 'Virtual Asset Service Provider (VASP)' under Article 2, Item 1 (h) of the Act on Reporting and Using Specified Financial Transaction Information. Consequently, operators are required to report to the Head of the Financial Intelligence Unit (FIU).

For detailed compliance requirements and reporting procedures, please contact the Financial Intelligence Unit (FIU) directly.