South Korean Lawmaker Calls For Stronger Oversight As Suspicious Crypto Reports Hit Record Numbers
As the variety of South Korean crypto traders surpasses the ten million milestone, a lawmaker from the nation’s ruling celebration has requested countermeasures to deal with the rising variety of suspicious transaction studies (STRs) involving digital belongings.
Suspicious Activity Reports Hit Record High
On Monday, Jin Sung-joon, a Democratic Party of Korea (DPK) lawmaker on the National Assembly’s Planning and Finance Committee, reportedly warned of the potential exploitation of digital belongings amid the crypto trade’s growing adoption.
“As stablecoins are more and more used as fee and settlement instruments in the true economic system, the potential for his or her misuse in overseas change crimes like unlawful forex change is rising,” Jin said.
The lawmaker shared knowledge from the Financial Intelligence Unit (FIU), revealing that the variety of STRs acquired from native digital asset service suppliers (VASPs) has practically doubled this 12 months. STRs hit a complete of 36,684 instances between January and August, exceeding the mixed instances from the earlier two years.
The variety of cases from the primary eight months of 2025 represents an 86% improve from 2024’s whole instances. Notably, the variety of instances acquired has surged considerably over the previous 5 years, leaping from 199 in 2021 to 10,797 in 2022. Meanwhile, the FIU recorded 16,076 and 19,658 STR instances in 2023 and 2024, respectively.
For context, home VASPs are required to report transactions suspected of cash laundering and illicit actions to the FIU beneath the present Specific Financial Information Act. Additionally, exchanges should formally register as a VASP with the FIU to acquire a license and be capable to conduct enterprise in South Korea, reminiscent of storage, brokerage, and administration of crypto belongings.
Earlier this 12 months, the monetary authority discovered that many well-known abroad crypto exchanges, together with BitMEX, KuCoin, CoinW, Bitunix, and KCEX, weren’t registered as VASPs, which led to 17 crypto apps being blocked in March.
According to Korea Customs Service (KCS) knowledge highlighted by the lawmaker, the worth of crypto-related crimes referred to prosecutors hit 9.5 trillion received, or $7.1 billion, between January 2021 and August 2025. 90% of those crimes concerned unlawful cross-border remittances facilitated by unlicensed channels.
South Korea’s Crypto Oversight
Authorities have additionally confirmed instances involving using stablecoins in unlawful transactions. Jin affirmed that each one related companies should work collectively to take efficient actions that handle the rise of those new kinds of crimes and develop a system to forestall these illicit actions.
Relevant companies, together with the Customs Service and the FIU, should implement efficient crackdowns—reminiscent of monitoring felony funds and blocking disguised transfers—whereas additionally growing systematic countermeasures towards these new kinds of overseas change crimes.
It’s price noting that the Financial Services Commission (FSC) has been working to develop digital belongings laws and shift its regulatory strategy over the previous 12 months. The monetary authority is anticipated to launch the long-awaited framework for the issuance and distribution of won-backed stablecoins subsequent month.
As the stablecoin sector features momentum worldwide, South Korean lawmakers have pushed to determine the required laws, with a number of payments being launched within the National Assembly this 12 months, together with two rival payments in July by Korea’s ruling and opposition events.
The banking sector has reportedly been in talks with Tether and Circle to debate potential partnerships, because it has been exploring numerous legalization eventualities over the previous few months. Ahead of the extremely anticipated regulatory framework, digital asset custody agency BDACS formally launched the primary South Korean won-backed stablecoin, KRW1, on the Avalanche blockchain.
In collaboration with Woori Bank, one of many 4 largest home monetary establishments within the nation, the crypto custodian plans to make the most of the won-pegged stablecoin as a “low-cost fee and settlement system for public-sector applications” and construct the “spine of the digital asset market.”
