South Korea’s FSC to monitor crypto whales for money laundering

Key Takeaways

  • FSC will monitor crypto whales with assets over $70,000 for AML compliance
  • The Financial Service Commission believes a major proportion of digital assets and stablecoins are highly susceptible to money laundering procedures
  • Consumers who deposit considerable amounts of digital assets will also be monitored for any significant change in holdings every quarter.

South Korea’s financial watchdog, the Financial Service Commission (FSC) to monitor crypto whales with assets worth more than $70,000 to ensure they abide by anti-money laundering rules.

According to FSC’s “Risk Assessment Index Development, Improvement, and Application Methods Study for New Business Areas” report, a major proportion of digital assets and stablecoins are highly susceptible to money laundering procedures, and therefore, special focus should be placed on monitoring crypto whales under the new Anti-Money Laundering guidelines.

“The greater the proportion of single-listed virtual assets and stablecoins in virtual asset operators, the higher the risk of money laundering,” the regulator said.

“In the case of an independently listed virtual asset, it is possible that it did not meet the listing criteria of other virtual asset operators, and it can be evaluated that the risk of money laundering of virtual asset operators with a high proportion of the virtual asset is high,” FSC stated

On top of this, the regulator will also be monitoring consumers who deposit considerable amounts of digital assets to determine whether they comply with AML guidelines. As per the local media report, those customers will be monitored for any significant change in holdings every quarter.

“Based on the sum of virtual assets owned by each customer multiplied by the closing price of the virtual asset at the end of the previous quarter, it is necessary to monitor the size and fluctuations of assets.”

South Korea has recently been increasingly cracking down on illegal crypto activity with FSC. Under South Korea’s President Yoon Suk-yeol, the country has been taking steps toward creating a more crypto-friendly regulatory environment amid unfavorable market conditions and the controversy surrounding the collapse of Terra. South Korean officials have redoubled their efforts to ensure investor protection since the Terra ecosystem’s collapse.

FSC recently found out that since June, there have been nearly $7.2 billion in “abnormal” foreign exchange transactions, most of which were transferred through cryptocurrency exchanges.

In August, the chair of FSC, Kim Joo-Hyun said the regulatory watchdog plans to expedite its review of 13 bills pending in the National Assembly related to digital assets. Kim had then said the upcoming crypto legislation would take a “balanced” approach toward the development of blockchain technology, investor protection, and market stability.

Saniya Raahath
Saniya Raahath

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