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South Korea to Tighten Crypto Tracking on Transfers Under 1 Million Won — New Rules Imminent

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South Korea is making ready to tighten oversight of cryptocurrency transfers beneath 1 million received, closing a niche that regulators say has more and more been used to transfer illicit funds with out triggering identification checks.

The transfer would expand the country’s so-called travel rule, which at the moment applies primarily to bigger transactions.

The plan is being reviewed by monetary authorities following the launch of a job pressure led by the Korea Financial Intelligence Unit (FIU) to revise the Act on Reporting and Using Specified Financial Transaction Information, typically referred to because the Special Act.

Regulators Turn Attention to Small Crypto Payments as Smurfing Grows

According to native media experiences, officers are inspecting whether or not to require exchanges to accumulate and share sender and recipient data for all digital asset transfers, together with these price 1 million received or much less.

The journey rule, generally described as a real-name system for crypto, obliges exchanges to confirm and document person particulars reminiscent of names and pockets addresses throughout deposits and withdrawals.

Authorities have pointed to the rising use of “smurfing,” a technique by which giant sums are damaged into many small transfers to keep away from reporting thresholds.

While higher-value transfers have lengthy been monitored, officers consider criminals have shifted exercise towards low-value transactions to bypass current controls.

Financial authorities have linked these patterns to tax evasion, drug trafficking, and the motion of unlawful funds abroad.

On November 29, the primary assembly of the FIU job pressure, which is headed by the Director Lee Hyeong-ju, was held to chart its broader reforms.

The focus of the controversy is on tightening management over the digital asset service suppliers, harmonizing the home laws with the worldwide ideas of the Financial Action Task Force, and enhancing the inspection and sanctioning mechanisms.

Authorities as nicely have admitted that the anti-money laundering regime, which was instituted over 20 years in the past in South Korea, has not been maintaining with cross-border digital crime and the booming digital sources.

South Korea Moves to Freeze Suspicious Crypto Accounts

Beyond the journey rule enlargement, the duty pressure is contemplating extra measures geared toward stopping funds from disappearing earlier than investigations can start.

This consists of introducing an account suspension system that may permit authorities to quickly freeze accounts suspected of being tied to severe crimes.

The proposed revisions would additionally prolong anti-money laundering obligations to sure professionals, reminiscent of legal professionals and accountants, who could also be concerned in advanced monetary transactions.

The crackdown on small transfers is part of a broader improve in crypto regulation that’s already taking place.

Local exchanges have been suggested by the Financial Supervisory Service to set up round the clock monitoring programs to determine irregular buying and selling and report the suspicious exercise to the regulators.

South Korea has acted equally and restricted entry to worldwide transactions thought-about to be high threat, forcing main utility shops to delete unregistered international apps that cater to the Korean market.

Simultaneously, exchanges are beneath much less examination of their monetary wellness and proprietorship varieties.

Proposed guidelines would bar people with previous convictions for tax or drug-related crimes from changing into main shareholders in licensed crypto companies.

From the second half of 2025, companies concerned in cross-border crypto transactions will also be required to preregister and submit common experiences to the Bank of Korea.

These home steps are unfolding alongside South Korea’s participation in worldwide data-sharing efforts.

The nation has joined the OECD’s Crypto-Asset Reporting Framework, which is able to allow tax authorities to change standardized data on crypto transactions throughout borders.

Transaction data are anticipated to start being collected subsequent 12 months, with full information sharing scheduled to start in 2027.

The publish (*1*) appeared first on Cryptonews.

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