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South Korea's New Crypto Regulations: A Robust Approach to Combat Financial Crimes

South Korea is ramping up its regulatory measures on cryptocurrency to combat financial crime effectively.

The Financial Services Commission (FSC) announced an expansion of the "Travel Rule," now requiring identity verification for transactions under 1 million won (approximately $680).

Previously, this rule allowed smaller transactions to bypass comprehensive identification checks, but the new regulations aim to close these loopholes.

Chairman Lee Eok-won emphasized the government's commitment to cracking down on money laundering and ensuring that illicit activities are curtailed within the crypto space.

Additionally, individuals with serious criminal records related to drug offenses or tax evasion will be barred from becoming major shareholders in virtual asset businesses.

To further enhance oversight, authorities plan to block high-risk foreign exchanges that pose potential money laundering threats to South Korean citizens.

A novel “preemptive account freeze system” will enable the immediate suspension of accounts suspected of being linked to serious crimes during investigations.

These measures will apply not only to transactions but also to the scrutiny of executives in the industry, ensuring strong governance.

The FSC intends to announce final details of these reforms in the first half of next year while increasing international cooperation, particularly with Southeast Asian financial intelligence units.

As South Korea tightens its grip on crypto regulations, the changes reflect a determined effort to protect the integrity of financial systems and curb unlawful activities.