What Korea's Foreign Exchange Transactions Act Amendment Means for Offshore Foundations and Exchanges
A column by Dennis Kim · May 2026
On May 7, 2026, the plenary session of Korea's National Assembly passed an amendment to the Foreign Exchange Transactions Act, establishing a new registration obligation for the cross-border transfer of virtual assets. A separate category—"digital asset transfer business"—was created, formally designating virtual asset service providers (VASPs) as the accountable parties for cross-border digital asset flows. The debate so far has centered mainly on the registration burden that domestic exchanges and custodians will carry. But the parties this amendment shakes most quietly, and most deeply, lie elsewhere: the offshore foundations and offshore exchanges that look at the Korean market from abroad.
Why Offshore Players Are the Crux
The structural signature of Korea's digital asset market is an asymmetry: domestic liquidity is enormous, yet much of the issuance and infrastructure sits offshore. The foundations that issue tokens are domiciled in Singapore, the Cayman Islands, Zug in Switzerland, or the British Virgin Islands (BVI), while liquidity and settlement infrastructure are held by global exchanges. Korean investors and Korean projects have transacted on top of this offshore structure.
