Korea Rules Overseas Crypto Holdings Must Be Declared, Even After Exchange Collapses

South Korea's National Tax Service has ruled that residents must declare cryptocurrency held at overseas exchanges under foreign-account disclosure rules, even if an exchange collapses and locks users out of trading or withdrawals.

The decision was made on August 28 and raises tax compliance and enforcement risk for offshore exchange holdings.

This means that South Korean residents who hold cryptocurrency on exchanges such as CEX will still be required to report their holdings, even if the exchange is no longer operational.

This ruling may shift activity towards domestic exchanges or decentralized exchanges (DEXs) in the country.