The Financial Intelligence Unit proposes to implement FATF rules to block suspicious crypto transactions during pre-trial investigations

South Korean authorities will tighten regulation of crypto exchanges

12.02.2024 - 10:58

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2 min

What’s new? South Korean authorities plan to inspect crypto exchanges to exclude platforms that do not have a license. The government is also considering an improved system for suspending suspicious transactions. This will quickly prevent the concealment of illicit funds at all stages of investigation. This is stated in a “2024 Work Plan” of the Financial Intelligence Unit (FIU).

Material by Yonhap News

What else is known? FIU plans to block unregistered crypto exchanges from accessing the Korean won market. The authority also intends to strengthen verification and anti-money laundering (AML) to shut down platforms already operating without a license. FIU plans to engage lawyers and accountants to do so.

An initial inspection will be conducted in the first half of 2024 to assess money laundering risks and market efficiency. A more detailed audit will be conducted in the second half of the year. Virtual asset operators that do not meet the standards will be excluded.

The unit plans to extend the scrutiny to large shareholders. It will also expand the scope of the law to disqualify those with a history of violations. In addition, social creditworthiness criteria, such as defaulting on debt obligations, will be taken into account.

It is also proposed to implement the Travel Rule from the Financial Action Task Force (FATF) to quickly identify crimes and stop suspicious transactions during pre-trial investigations.

Earlier, South Korea toughened penalties for violations of the law on the protection of users of virtual assets. Thus, for fraud, market manipulation, and insider trading, violators will receive from one year in prison or a fine of 3-5 times the amount of illegally obtained profit.

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