The Financial Services Commission will monitor crypto whales with 100 million won in assets, for the purpose of preventing money laundering and any illicit activities.
South Korea’s regulator, the Financial Services Commission, has announced the drawing up of new plans to control money laundering activities perpetrated by crypto whales.
The regulatory agency said it would start tracing and verifying transactions over $70,000, in a bid to further curb the activities of bad actors in the market.
The South Korean regulator highlighted that owning a large number of digital assets opens the door to the likelihood of use for money laundering purposes.
The South Korean Financial Services Commission has announced new rules for the cryptocurrency market that require tracking of cryptocurrency holders holding more than 100 million won ($347,000) in the asset class.
This is an effort to ensure that money laundering does not take place, one of many steps the financial regulator is taking to enforce AML (Anti Money Laundering).
The authorities say that “the higher the ratio, the higher the risk of money laundering,” and they believe stablecoins are likely to be used especially for criminal purposes. The report further explains that:
“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 assessed that the money laundering risk of virtual asset operators with a high proportion of virtual assets is high.
The report highlights stablecoins as a likely concern, as they can easily be used to carry out laundering activities. The country classifies dents as independent virtual assets, and they must be evaluated according to the current laws.
In addition to monitoring high-value customers, the report also states that the agency will investigate people who make high-value deposits. The report claims that retail users would be put under the microscope every quarter, as a change in their holdings could be a means of carrying out money laundering activities.
Crypto Whales Facing Extensive AML Rules
The South Korean Financial Intelligence Unit (FIU) is an agency dedicated to preventing money laundering and illegal fund flows. It recently conducted a survey of crypto exchanges focusing on AML violations and counter-terrorism financing obligations.
The agency concluded that there was insufficient compliance with these requirements. It has said that it will regularly disclose illegal transactions and activities. It also encourages exchanges to establish a proper AML system.
These rules relate to how to check for suspicious transactions and what to do in the event of a violation. For example, if someone withdraws 500 million won ($350,000) in 10 minutes, an investigation should be conducted. Failure to report suspicious activity by the exchange could result in a fine of nearly 30 million won.
South Korea Wants No Space for Money Laundering
South Korea has been particularly keen to ensure that money is not laundered through the crypto market. The FSC met with other government agencies at the Financial Action Task Force (FATF) meeting to discuss efforts related to AML and counterterrorism financing.
The FSC chief also called for caution regarding allowing domestic companies to enter the crypto market. Meanwhile, the Governor of the Financial Supervisory Service has said that cryptocurrencies could be subject to securities laws.
By Audy Castaneda
