South Korea is moving to tighten oversight of cryptocurrency transfers under 1 million won, aiming to close a loophole regulators say has been used to move illicit funds without identity verification.
Financial authorities are reviewing the plan through a task force led by the Korea Financial Intelligence Unit (FIU) to amend the Act on Reporting and Using Specified Financial Transaction Information, commonly known as the Special Act.
Officials are considering requiring exchanges to collect and share sender and recipient information for all crypto transfers, including low-value ones, as regulators warn that criminals increasingly use “smurfing” to split large sums into smaller transactions to evade reporting thresholds.
The FIU task force, chaired by Director Lee Hyeong-ju, held its first meeting on November 29, focusing on stronger oversight of virtual asset service providers, alignment with international anti-money laundering standards, and improved enforcement measures.
Officials have also acknowledged that South Korea’s existing anti-money laundering framework has struggled to keep pace with digital assets and cross-border cybercrime.
