South Korea plans $228 million crackdown on crypto laundering

South Korea's financial regulator is intensifying efforts to combat money laundering linked to virtual assets.

During Anti-Money Laundering Day, Kim Byung-hwan, chairman of the Financial Services Commission (FSC), highlighted a rise in the misuse of virtual assets for illegal activities.

He announced plans to amend foreign exchange regulations to enhance monitoring of cross-border virtual asset transactions.

The proposed changes will require pre-registration for operators handling these transactions and mandate detailed reporting to prevent tax evasion and currency manipulation.

Kim emphasised the importance of proactive measures against crimes affecting citizens, such as youth gambling and illegal reading rooms, moving beyond mere monitoring and investigation.

Concerns have also been raised regarding the anonymity of certain virtual assets, which complicates tracking illicit transactions.

The FSC is particularly wary of the "Kimchi premium," which attracts both legitimate and criminal actors, complicating efforts to curb money laundering.

“We will establish a system that can prevent crime by blocking the flow of criminal funds early and increase the effectiveness of confiscation by freezing accounts before funds are hidden,” Kim stated in a local report.

This initiative aligns with global trends in regulating cryptocurrencies to prevent their misuse in financial crimes.