South Korea's Financial Services Commission (FSC) Chairman Lee Eok-won announced that the country has begun a comprehensive crackdown on cryptocurrency-related money laundering activities. Speaking at the Financial Intelligence Analysis Institute’s 19th Anti-Money Laundering Day event, Lee announced that the regulation known as the “Travel Rule,” which requires identity verification for cryptocurrency transfers, will be expanded to include transactions under 1 million won (about $680). Under current regulations, local exchanges only collect sender and recipient information for transfers over 1 million won. However, authorities point out that this limit can easily be exceeded with small transactions, and that money laundering is often done by breaking it down into smaller amounts. The new system aims to eliminate these loopholes entirely. Lee also announced a ban on cryptocurrency transfers to foreign exchanges that pose a high risk of money laundering. This will prevent South Korean citizens from directly trading with risky platforms. The regulations will reportedly cover not only the transaction side but also industry executives. Accordingly, individuals with criminal records related to illicit substance use or tax evasion will not be eligible to become “major shareholders” in cryptocurrency companies. Furthermore, criteria such as financial standing, past financial behavior, and social creditworthiness will be more closely scrutinized during company licensing processes. Related News: Does Cathie Wood Still Think Bitcoin Will Reach $1.5 Million? Here Are Her Latest Comments The FIU also announced that it will implement a new “preventive account freezing system.” This system aims to prevent funds suspected of being linked to serious crimes from being smuggled abroad during the investigation process. Account freezing authority will be limited to serious crimes against public order, such as illegal drugs and gambling. Details of the regulations are expected to be announced in the first half of next year, and necessary amendments to the Private Financial Information Law are expected to be submitted to the National Assembly. It is also stated that South Korea will increase international cooperation within the framework of the FATF, particularly by conducting joint operations with financial intelligence units of Southeast Asian countries. *This is not investment advice. Continue Reading: Bad News for Cryptocurrencies from South Korea – Strict Regulations Announced
