South Korea Taps Brakes on Crypto Transfers and Overseas Exchange Interactions

South Korea's Financial Intelligence Unit has introduced revised supervisory rules for cryptocurrency transfers and offshore exchanges. The new measures require domestic virtual asset service providers (VASPs) to limit transfers to self-hosted wallets registered under the customer's own name, aiming to reduce money laundering and terrorist financing.

The rules also establish a three-tier risk-based framework for transactions with offshore exchanges. Transactions involving high-risk exchanges will be fully restricted, while lower-risk platforms may face fewer restrictions.

The implementation of these new rules is expected to be phased, with the self-hosted wallet measures taking effect in February next year. This change reflects South Korea's ongoing efforts to strengthen oversight and regulation of the crypto market.