South Korea’s Crypto Sector Raises Concerns Over New AML Regulations
- Proposed changes require virtual asset service providers (VASPs) to report overseas transactions of ₩10 million (approximately $6,800) or more as suspicious.
- The Digital Asset eXchange Alliance (DAXA) estimates this could increase suspicious transaction reports from about 63,000 to over 5.4 million annually.
- DAXA represents the views of 27 registered VASPs, including major exchanges like Upbit and Bithumb.
- The Financial Services Commission (FSC) proposed these amendments on March 30, with a public notice period ending May 11.
- Regulatory review is expected to finalize the rules by July.
The proposed AML regulations have sparked significant pushback from South Korea’s crypto industry, highlighting concerns about operational feasibility and compliance burdens for VASPs. As the industry grapples with potential increases in reporting requirements, tensions between regulatory oversight and practical implementation continue to rise.
With an estimated rise in suspicious transaction reports from around 63,000 to over 5.4 million, the implications of these proposed changes are significant for South Korean exchanges and their operations.
