The Digital Asset Exchange Alliance (DAXA) is supporting domestic virtual asset service providers (VASPs) in complying with an amended Foreign Exchange Transactions Act ahead of its implementation.
DAXA said it held a briefing in Seoul on Aug. 27 for domestic VASPs on building a dedicated foreign exchange computer network for virtual asset service providers.
The briefing was organised ahead of the revised Foreign Exchange Transactions Act taking effect on Dec. 3.
The key provision of the revised law is that it imposes a prior registration obligation on businesses seeking to engage in cross-border digital-asset transfer services. Registered businesses must report transfer details to the Bank of Korea foreign exchange computer network, including transaction amounts, types of digital assets and identifying information of senders and recipients.
This is the first time a management system for cross-border fund transfers using digital assets has been established by law.
Registration requirements include not only VASP reporting under the Act on Reporting and Using Specified Financial Transaction Information, but also linking computer networks with an institution that relays and centralises relevant data.
As a result, VASPs that do not meet the relevant requirements after Dec. 3 may face restrictions on cross-border digital-asset transfer services.
DAXA plans to build a VASP-only foreign exchange computer network to reduce the burden on businesses of having to build reporting systems individually. It will provide shared infrastructure needed for reporting to the Bank of Korea foreign exchange computer network and support the industry’s compliance.
Last month, ahead of the amended Telecommunications Fraud Damage Refund Act taking effect, DAXA also held a working-level meeting with non-won digital-asset exchanges to guide step-by-step procedures for victim relief, payment suspension and refunding victim assets.
DAXA Standing Vice Chairman Jaejin Kim (김재진) said, “DAXA will establish a dedicated computer network for virtual asset service providers to ensure smooth compliance with laws and regulations across the industry and to foster a sound market environment.”
