South Korean crypto exchanges reported 50% more suspicious transactions in 2023

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The FIU has been actively encouraging crypto exchanges to report any transactions that raise suspicions of money laundering and illegal “foreign exchange outflow.”

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South Korean crypto exchanges reported 50% more suspicious transactions in 2023

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According to South Korea’s Financial Intelligence Unit (FIU), the local virtual asset exchanges reported 49% more suspicious transactions to the FIU last year than in 2022. 

On Feb. 14, the FIU published the summary of its Work Plan for 2024, in which it shared crucial data and strategic initiatives for crypto market oversight.

The FIU has been actively encouraging crypto exchanges to report any transactions that raise suspicions of money laundering and illegal “foreign exchange outflow.”

As a result, the number of reports by the local crypto exchanges grew 49% in 2023 compared to 2022 — up to 16,076 cases from 10,797. In comparison, the number of total suspicious transactions, including but not limited to crypto assets, increased by a modest 10.2%.

The FIU press release also states that the number of notifications about suspected crypto crimes rose by approximately 90% in 2023 from a year-to-year perspective. However, the FIU neither discloses any other details on such notifications due to the Specified Financial Information Act nor does it specify whether such notifications have also come from the crypto exchanges, as in the case of suspicious transactions.

Related: Japan’s regulator suggests ‘stopping’ P2P transfers from fiat to crypto

The enforcement agency also counts 100 cases of unregistered crypto loan businesses that it has handled over to the National Tax Service and the National Police Agency. All these cases were tracked down on the basis of yearly suspicious transaction data accumulated by the FIU in December 2023 and January 2024.

This year, the FIU intends to “expand and reinforce” its crypto team, providing the necessary education and training. The agency also plans to launch a “virtual asset analysis system,” tracking and analyzing virtual asset transaction details and “complex movement paths.”

Days before the FIU’s official release, The Korea Times reported that the agency was going to introduce a preemptive trading suspension system for suspicious transactions on platforms already operating in South Korea, which will freeze transactions even during the pre-investigation phase. The latest release confirms this information.

On Feb. 7, another Korean regulator, the Financial Services Commission, announced that crypto criminals dealing with more than $3.8 million in illegal profits could face up to life in prison.

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