South Korea is preparing for a major tightening of its cryptocurrency oversight as Financial Services Commission Chairman Lee Eok-won unveils a new set of measures designed to block money laundering and strengthen the integrity of the virtual asset sector. Speaking at the 19th Anti-Money Laundering Day ceremony on November 28, Lee announced that the government will expand the scope of the Virtual Asset Travel Rule to include transactions below ₩1 million—a move aimed at closing long-criticised loopholes in the regulatory framework.
Under the current rule, crypto exchanges are required to collect identifying information—such as the names and wallet addresses of both sender and recipient—only for transfers that exceed ₩1 million. Regulators say this threshold has enabled illicit actors to sidestep monitoring by splitting transactions into smaller amounts. By lowering the minimum reporting requirement, authorities hope to disrupt this pattern and create a more transparent environment for crypto activity. Lee emphasised that criminal manipulation of virtual asset platforms remains a pressing threat, warning that law enforcement will intensify its crackdown on laundering attempts disguised as routine transactions.
The FSC also plans to take a firmer stance against operators with questionable backgrounds. As part of the upcoming policy shift, individuals with serious criminal histories—including convictions for drug-related offences or tax evasion—will be barred from becoming major shareholders in virtual asset companies. Officials argue that preventing people with high-risk profiles from influencing the direction of crypto businesses is essential to safeguarding market trust. This approach aligns with new guidelines that would allow authorities to suspend accounts linked to major crimes even before suspicious funds are moved, marking the introduction of a preemptive freeze mechanism overseen by the Financial Intelligence Unit.
While the system is expected to improve the government’s ability to intercept illicit capital flows, Lee clarified that it will be applied cautiously to avoid unnecessary inconvenience for ordinary users. The freeze authority will be limited to offences considered significant threats to public welfare, including drug crimes, gambling, and other high-risk activities. Additional checks on financial stability and social creditworthiness will also be incorporated into the review process for businesses seeking to register as virtual asset operators.
The FSC plans to formalise these policy changes in the first half of next year by submitting amendments to the Specific Financial Information Act to the National Assembly. Strengthening the FIU’s operational capacity is another priority, ensuring that the agency is equipped to enforce the new measures effectively. South Korea also intends to deepen its international cooperation—particularly with Southeast Asian FIUs—as part of broader efforts to counter cross-border cybercrime and terrorist financing. These initiatives are expected to feature prominently at next year’s FATF ministerial meeting.
The ceremony also highlighted contributions to the country’s anti-money laundering efforts, with Kakao Bank receiving the Presidential Citation and Acuon Savings Bank earning the Prime Minister’s Citation, among several organisations and individuals honoured for their role in strengthening financial security.
