New Anti-Money Laundering Regulations in South Korea
In an effort to enhance anti-money laundering measures, South Korea’s Cabinet approved new regulations on August 11 that will impose stricter rules on transfers between domestic cryptocurrency exchanges and foreign platforms, as well as self-hosted wallets.
Key Mandates from the Financial Services Commission
The Financial Services Commission (FSC) mandated that registered virtual asset service providers (VASPs) must implement risk-based controls for transactions exceeding 10 million won. Additionally, these providers need to monitor for suspicious activities internally, particularly focusing on larger transactions.
Shift from Previous Proposals
The changes in regulations represent a shift from a more stringent proposal introduced in March, which would have labeled all transactions over the 10 million won threshold to overseas exchanges or personal wallets as inherently suspicious. Following input from the industry, the FSC decided on a system where each registered provider evaluates risks according to their own controls, thus avoiding blanket suspicious transaction reports triggered solely by the amount involved.
Guidelines for International Transfers
Under the newly approved guidelines, transactions to low-risk international exchanges can proceed without extensive scrutiny. However, transfers concerning other overseas platforms or self-hosted wallets will generally only be sanctioned if both the sender and recipient are the same individual. Transfers involving higher-risk entities may be outright prohibited, according to the FSC.
“The new regulations aim to balance the need for security with the operational realities of the cryptocurrency market.”
