South Korea’s FIU Tightens AML Oversight to Tackle Crypto Crimes: Report
South Korea’s financial authorities are intensifying their anti-money laundering (AML) efforts to address emerging risks from the rapid growth of virtual asset transactions. The Financial Intelligence Unit (FIU), under the Financial Services Commission, convened the AML Inspection Trustee Council on March 5 to outline inspection strategies for 2025, local media reported.
Chaired by FIU Director Park Kwang, the council brought together AML officials from 11 oversight bodies, including the Financial Supervisory Service, the Ministry of the Interior and Safety, and the Korea Federation of Mutual Savings Banks. The meeting aimed to ensure consistency in AML inspections and enhance the rapid sharing of risk factors tied to financial crimes.
In 2024, South Korea was identified as one of the top global destinations for crypto businesses, further highlighting the need for robust regulatory oversight. The country accounts for about 30% of global crypto trading, with around 4% of its population holding digital assets.
New AML Measures to Tackle Emerging Financial Threats
One of the key topics discussed was strengthening enforcement against crimes that affect everyday citizens. The FIU intends to counter new money laundering methods, such as misuse of virtual accounts and easy remittance services, which have become prevalent with digital financial transactions. To tackle these issues, the agency plans to establish a Joint Response Team for AML Crimes Against the Public in collaboration with the Financial Supervisory Service and financial institutions. This response team, set to operate bi-monthly, will analyze suspicious transaction patterns linked to voice phishing, multi-level fraud, gambling, and drug-related financial crimes.
South Korean authorities will issue warnings to industry stakeholders and adjust their inspection focus based on crime exposure risks, media reports, and industry feedback. The FIU has also pledged to monitor evolving money laundering techniques and tighten scrutiny on virtual asset-related transactions.
South Korea Regulators Focus on High-Risk Money Exchange Operators
Regulatory agencies presented their latest AML inspection findings and outlined priorities for the year ahead. The Financial Supervisory Service announced plans to expand oversight of financial institutions that have not undergone recent AML inspections. It will also focus on businesses flagged for weak AML management in prior assessments. Additionally, the agency will evaluate cooperation between consumer protection and AML departments to bolster financial institutions’ ability to detect and prevent financial crimes.
Meanwhile, the Korea Customs Service reported that last year’s inspections uncovered AML violations at 45 out of 77 money exchange operators, including online and unmanned services. This year, it plans to classify operators into high-risk and low-risk groups based on transaction volumes and exposure to financial crime, with targeted inspections for high-risk entities. Other agencies, including the Ministry of the Interior and Safety and the Postal Service Headquarters, announced plans to assess risk management at cooperative financial institutions and scrutinize adherence to customer identification obligations.
Emphasizing the importance of AML measures, Director Park stated that a robust system is crucial for safeguarding financial transparency and preventing the spread of crimes like voice phishing and drug-related transactions. He urged inspection agencies to stay vigilant as financial technology evolves, ensuring AML frameworks adapt to emerging risks while imposing strict penalties on non-compliant entities.
