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MarketSouth KoreaCrypto ExchangeSouth Korean Exchanges
Sep 7, 2026
2min read
bySarala
forTheNewsCrypto
South Korea’s National Tax Service ruled on Aug 28 that residents must still report cryptocurrency accounts held at bankrupt overseas exchanges under foreign account reporting rules, with combined overseas balances above ₩500 million (~$361,000) due to be reported to the NTS the following June. The clarification, after virtual asset accounts were added to reporting in 2023 and following ₩10.5 trillion in overseas virtual assets declared in 2026 (down 5.4%), increases compliance and tax scrutiny for CEX users and creditors unable to withdraw funds, raising regulatory risk for crypto adoption and market participants.
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- South Korea says crypto accounts at bankrupt overseas exchanges still fall under its foreign account reporting rules.
- Residents with combined overseas financial account balances above ₩500 million must report them to the NTS the following June.
South Korea’s National Tax Service (NTS) has clarified that residents may still have to report cryptocurrency accounts held with overseas exchanges even after those platforms have gone bankrupt and customers can no longer trade or withdraw their assets.
The NTS issued the interpretation on August 28 after a South Korean resident asked whether an account with a bankrupt overseas crypto exchange remained subject to the country’s foreign financial account reporting rules. The resident was a creditor of an overseas virtual asset exchange that filed for bankruptcy in November 2022. The account could no longer be used for normal trading or withdrawals, and the assets had become part of the bankruptcy process.
Bankruptcy Does Not Remove Reporting Requirement
The tax agency said an account opened with an overseas virtual asset service provider for digital asset transactions remains subject to reporting even if the exchange later becomes insolvent. The ruling focuses on the account reporting requirement and does not itself determine whether the assets are subject to additional tax.
Under South Korea’s Adjustment of International Taxes Act, residents and domestic companies must report their overseas financial accounts when the combined balance exceeds 500 million won ($361,000) at the end of any month during the year. The report must be filed with the tax authorities in June of the following year. The threshold applies to the combined balances of qualifying overseas accounts rather than just one account.
Virtual asset accounts were added to South Korea’s overseas financial account reporting system in 2023. The requirement covers qualifying accounts held with overseas virtual asset service providers alongside other foreign financial accounts.
The NTS also reported that overseas virtual assets declared in the 2026 reporting cycle totaled 10.5 trillion won, down 5.4% from the previous year. Individual holdings rose 5.4% to 9.8 trillion won, while corporate holdings fell 61.1% to 700 billion won. The agency attributed the overall decline partly to lower virtual asset prices.
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Source: cryptorank.io