South Korea’s FIU Launches AML Measures Against Crypto Fraud

• South Korea strengthens AML measures to combat rising crypto-related financial crimes.
• FIU forms Joint Response Team to tackle fraud and crypto crimes targeting vulnerable groups.
• South Korea’s 2025 AML strategy focuses on enhancing compliance within the crypto sector.

The Financial Information Unit (FIU) of South Korea is enhancing its anti-money laundering operations targeting the fast-growing crypto market. The government has launched new approaches to defend vulnerable groups against criminal financial activities, focusing on digital assets and virtual accounts.

The Financial Intelligence Unit organized a meeting on March 5 that gathered 11 key financial oversight entities to review the future AML framework. The Financial Supervisory Service and the Ministry of the Interior and Safety are among these institutions. The meeting aimed to assess risks and streamline AML efforts across the country.

Focus on Crypto and Digital Asset Crimes

One of the central topics discussed was the misuse of virtual accounts and simple remittance services, which have become prominent with the digitization of financial transactions. The FIU intends to combat these new threats through enhanced monitoring and stricter regulations targeting crypto-related financial crimes. A new Joint Response Team has been established to detect and mitigate vulnerabilities in the sector, particularly frauds such as voice phishing, multi-level fraud, and gambling-related financial crimes.

The team will collaborate with financial institutions and operate bi-monthly to analyze suspicious transaction patterns. The goal is to identify emerging crime trends and issue industry-wide warnings to prevent further misuse of virtual assets.

Related: Bybit, Phemex Hacks Linked to Lazarus Group’s Cyber Crimes

Inspection Focus and Industry Cooperation

The Financial Supervisory Service also presented its 2025 inspection strategy. The agency will concentrate on financial institutions that have not undergone recent AML checks. It intends to evaluate companies that lack strong AML controls and strengthen the collaboration between AML and consumer protection teams. The organization aims to enhance the financial sector’s crime prevention capabilities as part of broader efforts.

In its 2024 inspection report, the Korea Customs Service uncovered violations at 45 of 77 money exchange operators. Based on transaction volumes and the likelihood of criminal involvement, the Korea Customs Service will categorize money exchange businesses into high-risk and low-risk groups which will guide the focus of future inspections.

In separate documents, the Ministry of the Interior and Safety and the Postal Service Headquarters revealed their strategies to strengthen financial crime oversight. Government agencies have outlined their plans for cooperative risk assessment and customer identification procedure enforcement.

A Broader Push for Financial Transparency

FIU Director Park Kwang told lawmakers that a well-operating AML framework is crucial in preserving financial sector transparency and trust. According to his report, ineffective AML programs could result in higher financial crimes that would damage social order and the protection of vulnerable people.

The rise of global cryptocurrency companies in South Korea has created a necessity for stronger Anti-Money Laundering regulations from regulators. The measures adopted target security within the financial ecosystem to ensure valid transactions happen securely in crypto operations.

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