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Crypto Whales in South Korea to Come Under Surveillance to Prevent Money Laundering

2 mins
Updated by Ali Martinez
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In Brief

  • The Financial Service Commission will monitor crypto whales with 100M won in assets.
  • The agency wants to prevent money laundering and any illicit activity.
  • Other agencies in the country have also been working on AML measures, ramping up compliance enforcement.
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The Financial Service Commission in South Korea will monitor crypto whales with more than 100M won in assets. It seeks to prevent any money laundering or illicit activity.

South Korea’s Financial Service Commission has announced new rules for the crypto market that mandates the monitoring of crypto holders who have more than 100 million won ($347,000) in the asset class. This is an effort to ensure that no money laundering takes place, one of the many steps the financial regulator is taking to enforce AML.

It says that “the larger the proportion, the higher the risk of money laundering” and believes that stablecoins especially are likely to be used for criminal purposes. The report reads,

“In the case of an independently listed virtual asset, it is possible that it did not meet the listing criteria of other virtual asset operators, and it can be evaluated that the risk of money laundering of virtual asset operators with a high proportion of the virtual asset is high.”

This is yet another step by the FSC to enforce some rules on the market. The collapse of the Terra ecosystem roiled the country. Officials have now redoubled their efforts to ensure investor protection.

Crypto whales facing extensive AML rules

South Korea’s Financial Intelligence Unit (FIU) is an agency dedicated to preventing money laundering and illegal fund flows. It recently conducted a survey on crypto exchanges focusing on AML violations and counter-terrorism financing obligations.

The agency concluded that there was insufficient compliance as far as these requirements were concerned. It has said that it will regularly disclose illegal transactions and activities. It also encourages exchanges to establish a proper AML system.

These rules relate to how to check for suspicious transactions and what to do in case of a violation. For example, if someone withdraws 500M won ($350,000) in 10 minutes, an investigation must take place. If the exchange fails to report suspicious activity, it could result in a fine of nearly 30M won.

South Korea wants no room for money laundering

South Korea has been particularly keen on ensuring that no money laundering takes place through the crypto market. The FSC met with other government agencies in the Financial Action Task Force (FATF) assembly to discuss efforts related to AML and counter-terrorism financing.

The head of the FSC also asked for caution with respect to allowing domestic companies to enter the crypto market. Meanwhile, the Governor of the Financial Supervisory Service has said that crypto could be subject to securities laws.

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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
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