South Korea Strengthens Its Regulatory Framework Against Illicit Money Movement in Virtual Assets

The fight against illegal financing in the crypto sector has just taken a more rigorous turn in South Korea. During the commemoration of the 19th Money Laundering Awareness Day, Lee Eui-kyung, the head of the Korean Financial Services Commission, announced a significant strengthening of controls over cryptocurrency transactions operating under limits of 1 million won ( approximately $680). This regulatory adjustment represents an expansion of the verified identity system already in place in the country, known as the ‘travel rule’.

New Control and Verification Measures

The country’s approach focuses on three main pillars. First, supervision now extends to digital asset movements below the previously established threshold, closing gaps that could be exploited for money laundering. Second, South Korea has decided to impose restrictions on operations with foreign platforms that present high-risk profiles in terms of fund legitimacy.

The third component involves a thorough scrutiny process targeting major holders of cryptocurrency-related businesses. This analysis will include detailed reviews of legal backgrounds, financial stability, and credit ratings of significant shareholders.

The Regulatory Context in South Korea

These decisions reflect a growing global concern about how virtual assets could be used in illicit value transfer schemes. South Korea, as an important crypto trading hub in Asia, aims to solidify its position as a trustworthy market by maintaining increasingly strict compliance standards in digital transactions.