South Korea: Report overseas crypto accounts after collapse

South Korea requires residents to report overseas crypto accounts as foreign financial accounts, even if the exchange is bankrupt and access is blocked.

South Korea’s National Tax Service now requires residents to report overseas cryptocurrency accounts as foreign financial accounts, even if the exchange has collapsed and access to funds is blocked. This rule applies as long as the account was opened with a foreign virtual asset service provider, regardless of whether the account holder can currently trade or withdraw assets. The decision follows a case where a resident, who was a creditor of a bankrupt overseas crypto exchange, continued to receive partial payouts through bankruptcy proceedings. The reporting requirement is separate from the new tax on crypto gains, which will begin in January 2027. For the 2026 disclosure cycle, the total value of digital assets reported is expected to reach 10.5 trillion KRW, a 5.4% decrease from 2025. Residents must declare if their combined foreign account balances exceed 500 million won at any month-end during the year.