The South Korean government is moving ahead with steps to share the transaction history of foreign investors trading Bitcoin and other cryptocurrencies on local exchanges such as Upbit and Bithumb. 

At the same time, the government plans to collect data on South Koreans using overseas virtual asset exchanges, which will be shared with the National Tax Service starting next year.

The effort is designed to align with global standards for tax transparency and prevent offshore tax evasion.

CARF rules to be introduced

According to the Ministry of Economy and Finance, an administrative notice will be issued this month to set the rules for the Crypto-Asset Automated Clearing Facility, or CARF. 

The system allows the automatic sharing of crypto transaction records every year between 48 participating countries, including the UK, Germany and Japan. 

The framework is part of an international campaign led by tax authorities to tighten oversight of digital assets and curb the use of crypto for hiding wealth offshore.

South Korea joined this initiative by signing the Multilateral Exchange of Information Agreement at the OECD Global Forum last November. Officials said the notice will spell out how domestic exchanges must implement the system.

Also Read: South Korea’s Jeju City Cracks Down on 2,962 Individuals in Tax Arrears Using Crypto Seizures

“The purpose is to establish detailed regulations for implementing the Virtual Asset Information Exchange Agreement,” one ministry official explained.

Impact on domestic operators and investors

Under the agreement, local crypto operators will need to collect and submit personal and transaction data of foreign users to their national tax agencies beginning in 2026. 

Each participating country will then share the information through the OECD platform. The official launch of data sharing is scheduled for 2027, but exchanges must start recording transaction details from 2025.

Korean investors trading on exchanges abroad will also be under greater scrutiny. At present, individuals must self-report overseas financial accounts that exceed KRW 500 million ($358K) in value, covering stocks, deposits and crypto holdings. 

Data from the National Tax Service shows that overseas virtual assets declared this year totalled KRW 11.1 trillion ($7.9 billion), up KRW 700 billion ($501 million) compared to last year. 

Under the CARF framework, tax authorities will have direct access to transaction data regardless of account size, which officials say will close gaps in the current voluntary reporting regime.

Tax rules and international context

Although South Korea has postponed taxation on domestic crypto investment income until 2027, other major economies have already begun taxing virtual asset gains. 

The US and Germany are among the countries applying such rules. Government officials in Seoul stressed that the new data sharing plan is tied to international agreements and should not be confused with the deferred domestic tax system.

The move comes at a time when retail investors in South Korea are showing more interest in digital assets. A report from the Korean Centre for International Finance noted that local investors who once favoured US tech stocks are now shifting toward shares connected to the crypto industry, particularly firms linked with stablecoins.

The introduction of CARF represents a major shift in how governments treat crypto assets. For South Korea, it means tighter cooperation with international tax authorities and a stronger ability to track cross-border activity.

Also Read: South Korea’s FSC To Unveil Regulatory Framework For Won-Denominated Stablecoins This October