Bank of Korea admits legal hole in monthly crypto balance reporting

In short

• The Bank of Korea has admitted legal obstacles to its monthly crypto balance reporting rule and is discussing fixes with the finance ministry.
• Exchanges can't block deposits or withdrawals for users who refuse consent, so they can't force the reports through.
• The rule covers 1,272,878 users at the five largest won-based exchanges with a cross-border transfer since 19 July 2024.
• Daily transfer reporting starts on 3 December 2026; the bank says it will finalise the balance-reporting details in November.

The Bank of Korea has acknowledged that its plan to collect monthly crypto balance reports runs into a legal wall, and is discussing with the Ministry of Economy and Finance how to narrow it, according to a Seoul Economic Daily report on 26 October 2026. The problem is consent: exchanges can't block deposits and withdrawals for customers who refuse to share their data, so they have no way to force the reports through.

The Bank of Korea, the country's central bank, will act as the reporting hub for crypto assets sent across national borders once the amended Foreign Exchange Transactions Act comes into force on 3 December 2026. In addition to daily transaction records, it has drawn up a monthly balance return, known as FX1021, which would apply to every exchange customer who has made even one overseas transfer since 19 July 2024.

Rep. Park Soo-young's office, of the People Power Party, has put the number at 1,272,878 — the customers of the country's five largest won-based exchanges who made at least one cross-border transfer between 19 July 2024 and the end of September 2026, a figure BlockchainReporter also carries. That works out at roughly 254,576 users per exchange, each pulled into a monthly filing regime by a single past transfer.

Why exchanges can't force the reports

The draft manual, formally the Manual on Foreign Exchange Computer Network Reporting for Virtual Currency Transfer Operators, went to the Digital Asset eXchange Alliance (DAXA), the body that represents Korean exchanges, on 2 October and was obtained by Rep. Park's office on 23 October, according to BlockchainReporter. It asks for each user's month-end holdings, their won-converted balances and the month's cross-border inflows and outflows, due by 5:30 p.m. on the 10th day of the following month. ChainCatcher reported the same deadline and said the reports cover coin counts, won-converted balances and monthly flows, even in months with no new cross-border trades.

The legal snag is Article 11 of the Virtual Asset User Protection Act, which bans exchanges from blocking deposits and withdrawals without justifiable cause. Refusing consent to share personal information isn't listed as grounds for a block under the enforcement decree. "If we ask customers to consent to providing personal information for balance reporting, we expect a significant share will refuse," an exchange official told Seoul Economic Daily. "But we cannot block deposits and withdrawals for those who do not consent, so it is realistically difficult to operate the reporting system."

The Bank of Korea met officials from domestic exchanges on 16 October to talk through the practical problems, financial industry sources told Seoul Economic Daily. At that meeting the exchanges said compliance is virtually impossible under current law. A Bank of Korea official said the bank is "keeping all options open, including narrowing the scope of balance reporting as much as possible and requiring it only when necessary", and that details would be finalised during November.

1.27 million users in the pool

For ordinary holders, the immediate effect is uncertainty rather than a new form to fill in. Anyone who has sent crypto to an overseas exchange or a personal wallet since July 2024 could fall inside the monthly reporting pool, whether or not they trade again. For exchanges, the burden is operational: they would have to collect consent, store balance data and file it every month, without the option of freezing an account that says no.

Korean users on X have been quick to mock the plan. One poster, 황폐화된코인러 (@iunsong2206), said on X that if the bar is that low, public officials should have their names and affiliations published every month too. Another, 옆자리형 (@bophalman), said on X that digging through every contract doesn't tell anyone whether they'll get their money back after losing it in crypto. A third, Untitled (@untitled1150), said on X by asking whether even communist-style policies now make a country a leading nation.

Rep. Park has already challenged how far the manual reaches. Checking all the details of virtual asset users merely because they once used an overseas transfer amounts to over-collecting personal data, Rep. Park argued, according to BlockchainReporter, and gathering personal information, asset and transaction records alongside crypto taxation could make the market contract further. Critics cited by Seoul Economic Daily said that agencies were still debating this clash only just over a month before the rule takes effect, which suggests poor preparation.

What the monthly form asks for

The 3 December start for daily transfer reporting is fixed. What remains open is the monthly balance form: the Bank of Korea has said it will settle the details in November, after talks with the Ministry of Economy and Finance and crypto operators. No named exchange or DAXA has made a public statement on the legal obstacle.

Timeline

• 19 Jul 2024: Virtual Asset User Protection Act takes effect, the baseline for the reporting pool
• 2 Oct 2026: Bank of Korea sends draft reporting manual to DAXA
• 23 Oct 2026: Rep. Park Soo-young's office obtains the draft manual
• 3 Dec 2026: Amended Foreign Exchange Transactions Act takes effect; daily transfer reporting begins

Questions readers ask

What is the Bank of Korea's monthly crypto balance reporting rule?

It is a draft requirement under which Korean exchanges would file each covered user's month-end crypto holdings, won-converted balances and monthly cross-border flows with the Bank of Korea by 5:30 p.m. on the 10th day of the following month. It would cover users with a cross-border transfer since 19 July 2024, according to BlockchainReporter.

Why can't Korean exchanges enforce the balance reports?

Article 11 of the Virtual Asset User Protection Act bars exchanges from blocking deposits and withdrawals without justifiable cause, and refusing consent to share personal information is not listed as grounds under the enforcement decree. Exchanges told Seoul Economic Daily they therefore cannot force customers to consent, making the monthly reports hard to operate.

How many users does South Korea's crypto reporting plan cover?

According to the office of Rep. Park Soo-young of the People Power Party, 1,272,878 users at the country's five largest won-based exchanges had a cross-border crypto transfer record between 19 July 2024 and the end of September 2026. That is about 254,576 users per exchange, as BlockchainReporter reported.

When does South Korea's crypto transfer reporting start?

Daily reporting of cross-border crypto transfers begins on 3 December 2026, when the amended Foreign Exchange Transactions Act takes effect. The Bank of Korea has said it will finalise the details of the separate monthly balance reporting during November, after talks with the Ministry of Economy and Finance and crypto operators.

Our view

At InvestIn.News, we expect the Bank of Korea to narrow the monthly balance reporting sharply rather than delay it. The 3 December start for daily transfer reporting is fixed, and the bank's own official has said it is keeping all options open, including cutting balance reporting to what is strictly necessary.

The legal problem is real. Article 11 of the Virtual Asset User Protection Act stops exchanges blocking deposits and withdrawals without justifiable cause, and refusing consent to share data is not on the list. A rule that depends on consent nobody can compel cannot stand as drafted.

The retroactive baseline is the part most likely to go. Pulling 1,272,878 users into monthly filings because of a single transfer since 19 July 2024 goes well beyond what foreign-exchange monitoring needs, and Rep. Park Soo-young has called it excessive collection of personal information.

We would treat a November announcement that trims the pool, or limits reports to users with recent transfers, as confirmation of this view. A decision to postpone the balance form altogether would change it.

Follow the latest news as it breaks on Regulation NewsFeeds.

Ishu Aggarwal

What to watch: The Bank of Korea has said it will finalise the reporting details in November, before the 3 December start.