South Korean regulators are intensifying efforts to prevent financial crimes and strengthen the integrity of the nation’s financial system, particularly in the rapidly evolving crypto landscape.
The country’s Financial Intelligence Unit (FIU) is reportedly tightening anti-money laundering (AML) regulations by strengthening oversight of crypto transactions.
Local news outlet Wow TV reported the agency outlined new strategies to combat illicit financial activities at the AML Inspection Trustee Council event held on March 5, 2025. A key initiative mentioned was creating a joint response team comprising the FIU, the Financial Supervisory Service (FSS), and other financial institutions. This team will monitor transactions and identify suspicious patterns linked to voice phishing, multi-level fraud, gambling, and drug-related financial crimes.
The team would meet bi-monthly, report on AML-related activities, and issue warnings to industry players at high risk of AML violations.
The FIU also pledged to actively assess emerging money laundering methods, including the exploitation of crypto trading accounts and remittance services for illicit financial activities.
Park Kwang, the head of the Unit, emphasized that the integrity of the AML framework is essential for preventing the flow and concealment of illicit funds, thus safeguarding the community. He warned that if this system fails to operate effectively, it could lead to an increase in livelihood crimes, which particularly endanger vulnerable populations.
In parallel, the FSS announced an expansion of its AML monitoring efforts. It will closely examine financial firms recently investigated for AML-related concerns and reassess companies flagged for weak compliance in previous audits. The agency also noted it will evaluate the cooperation between consumer protection and AML departments within South Korean firms to enhance detection and prevention mechanisms.
These regulatory measures come amid heightened scrutiny of the crypto sector. The FIU recently imposed a three-month suspension on Upbit’s new customer transactions for violating South Korean regulations by facilitating dealings with unregistered crypto service providers. This led to sanctions against nine employees and a disciplinary warning for the CEO of Dunamu, the crypto exchange’s parent company.
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