South Korea’s Financial Intelligence Unit (FIU) has announced new anti-money laundering (AML) measures aimed at tightening monitoring on crypto transactions and other financial activities linked to illicit crimes. The initiative, revealed on March 5 at the AML Inspection Trustee Council, underscores the country’s commitment to addressing financial crimes within the digital asset space.
Joint Response Team for AML Crimes
As part of its strategy, the FIU plans to establish a joint response team in collaboration with the Financial Supervisory Service (FSS) and financial institutions. This task force will monitor suspicious transactions linked to crimes such as voice phishing, multi-level fraud, gambling, and drug-related financial activities. The response team will meet bi-monthly to analyze financial patterns and issue reports on recent AML-related trends.
Additionally, authorities will begin issuing warnings to industry players identified as vulnerable to AML violations. The selection criteria will be based on risk assessments, media reports, and industry requests.
Focus on Crypto-Related Money Laundering
The FIU has pledged to closely examine new and evolving money laundering tactics, including the misuse of crypto trading accounts and illicit remittance services. With the increasing flow of funds through digital asset transactions, authorities aim to bolster oversight and enforcement to prevent financial crimes within the crypto space.
The Financial Supervisory Service has also expanded its monitoring efforts, particularly targeting financial firms previously flagged for weak AML controls. The agency will focus on companies under investigation for suspicious AML activity, ensuring they comply with stricter regulations.
Recent Crackdowns on Financial Crimes
According to the Korean Customs Service, authorities conducted inspections on 77 high-risk financial entities last year, including money exchange offices and online remittance services. The investigation found that 45 firms failed to report unusually large transactions, violating AML regulations.
To further enhance compliance, the FSS announced plans to assess the effectiveness of cooperation between consumer protection and AML departments within South Korean financial institutions. This initiative aims to strengthen their ability to detect and prevent money laundering activities.
South Korea’s Growing Focus on Crypto Regulation
On February 28, the South Korean government elevated a temporary task force into a permanent joint investigation unit dedicated to tackling crypto-related crimes and fraud. This move reflects the increasing prevalence of crypto-related financial crimes in the country and the government’s resolve to enhance regulatory enforcement.
With these new AML measures, South Korea is taking a more aggressive stance against illicit financial activities, particularly within the crypto sector. As regulatory frameworks evolve, financial institutions and crypto platforms will be required to comply with stricter oversight to ensure a safer financial ecosystem.
