Korea Cracks Down on Illicit Crypto Transfers
South Korea is tightening its regulatory grip on cryptocurrency transactions by granting financial authorities the power to freeze exchange accounts suspected of illicit transfers.
The proposed amendment to the Act on Reporting and Use of Certain Financial Transaction Information would expand the legal definition of an 'account' to include unique identifiers assigned by virtual asset service providers (VASPs), such as cryptocurrency exchanges. This change aims to close a regulatory gap that has allowed illicit activity to flourish in the country's digital asset market.
The bill would also grant the Financial Intelligence Unit (FIU) direct authority to request payment suspensions for accounts suspected of being used to transfer illicit assets, allowing regulators to act more quickly and efficiently in investigating suspicious financial activity.