South Korea will extend transaction monitoring in won to combat virtual money laundering

South Korea’s Financial Services Commission (FSC) will soon implement a significant expansion in the regulation of cryptocurrency transfers, according to NS3.AI. This measure aims to lower the current monitoring threshold set at 1 million won (equivalent to $680), allowing broader coverage of smaller virtual asset transactions that are currently not subject to effective oversight.

Reduction of the threshold in won and strengthening of control

The regulatory move responds to the urgent need to reinforce anti-money laundering protocols in the digital asset sector. By lowering the threshold measured in won, the FSC will be able to detect and prevent cross-border illicit operations that have historically exploited regulatory gaps in smaller transactions. This strategy represents a fundamental shift in how South Korea monitors virtual capital flows, moving from oversight focused on large-scale transactions to a more granular and comprehensive supervisory system.

Impact on the prevention of financial crimes

The new FSC provisions are designed to close gaps exploited by criminals to transfer illicit funds through multiple smaller transactions. By adjusting the won threshold, suspicious movement patterns that previously went unnoticed are expected to be identified. This initiative reflects South Korea’s commitment to international standards of financial compliance and the prevention of terrorism financing and other serious crimes.

Digital transformation and modernization of financial supervision

Beyond immediate regulatory adjustments, the FSC is driving a comprehensive transformation of the regulatory ecosystem through the integration of artificial intelligence and advanced data analysis technologies. This evolution aims to improve detection and response capabilities against illicit activities, optimizing information sharing among financial institutions. The approach adopted by the FSC combines stricter regulation with cutting-edge technological tools, positioning South Korea as a leader in digital financial supervision within the Asian region.

The expansion of the Travel Rule to lower thresholds in won marks an important milestone in the evolution of South Korea’s virtual asset regulatory framework, demonstrating that supervisory agencies are evolving in step with the security and compliance challenges presented by the contemporary crypto ecosystem.