South Korea is making ready one in all its hardest Anti-Cash Laundering (AML) crackdowns because it plans to broaden its crypto Journey Rule to cowl transactions beneath 1 million gained ($680).
In accordance with a Yonhap Information report, the chairman of the nation’s Monetary Providers Fee (FSC), Lee Eok-won, revealed the plans to the Nationwide Meeting’s Laws and Judiciary Committee on Wednesday, saying that the federal government will crack down on cash laundering actions that exploit crypto transactions.
“We’ll crack down on crypto cash laundering […] increasing the Journey Rule to transactions beneath 1 million gained,” he mentioned, in response to a translated model of his feedback.
The transfer closes a spot that allowed customers to interrupt transfers into smaller items to keep away from identification reporting mandates. With the deliberate change, exchanges will likely be required to gather and share the sender and receiver for crypto transfers beneath $680.
Combating drug trafficking, tax evasion and abroad schemes
The FSC mentioned the brand new guidelines intention to cease the rising use of crypto rails for tax evasion, drug trafficking and different abroad fee schemes.
The expanded rule will likely be applied together with new restrictions focusing on “high-risk” offshore exchanges. In accordance with the regulator, these are platforms that pose a heightened threat of cash laundering and will likely be blocked from interacting with South Koreans.
Exchanges may also endure extra stringent opinions of their monetary well being, widening the factors for digital asset service supplier (VASP) registration.
Moreover, the federal government will prohibit people with legal information involving medicine or tax crimes from turning into main shareholders of VASPs. This goals to forestall malicious actors from holding influential positions at licensed corporations.
The Monetary Intelligence Unit (FIU) will introduce pre-emptive account freezing mechanisms for severe offenses to cease funds from disappearing throughout investigations.
Officers plan to finalize the brand new framework within the first half of 2026 and submit legislative amendments to the Nationwide Meeting, whereas increasing their collaboration with international our bodies, such because the Monetary Motion Process Drive.
The forthcoming adjustments symbolize the nation’s most complete transfer to tighten AML rules for the reason that Particular Monetary Info Act was up to date in 2021.
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South Korea cracks down on tax evasion
The announcement follows earlier efforts in South Korea to fight tax evasion.
On Oct. 19, a Nationwide Tax Service (NTS) official mentioned the company was ready to conduct dwelling searches and confiscate chilly wallets and onerous drives if the house owners had been suspected of hiding their crypto belongings offline to keep away from paying taxes.
The NTS mentioned it will analyze tax delinquent histories utilizing crypto-tracking applications, and if they’re suspected of offline concealment, they are going to be topic to such searches and seizures.
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