South Korea’s Financial Intelligence Agency reported that the number of cryptocurrency transactions suspected of being involved in money laundering, market manipulation and drug trafficking hit a record high in 2023.
South Korea has seen a surge in cryptocurrency trading, especially after the market recovered. Accordingly, the country’s authorities received nearly 49% more alerts on potentially suspicious transactions from cryptocurrency service providers in 2023 than the previous year.
South Korea recorded 16,076 cryptocurrency transactions in 2023 that were suspected to be related to activities such as money laundering, market manipulation or illegal drug dealing, according to a document from the Financial Intelligence Unit (FIU).
Suspicious cryptocurrency transactions surge in South Korea
In a recent press release, the Financial Intelligence Unit attributed the rise to improved communication with domestic companies, urging them to report such activities.
It also mentioned that the number of reports related to suspected cryptocurrency-related crimes surged by about 90% in 2023 compared to the previous year.
However, the agency did not provide specific information about these alerts, citing the Specified Financial Information Act. It also did not clarify whether these alerts also originated from cryptocurrency exchanges, similar to suspicious transaction reports.
To date, the National Tax Service and the National Police Agency have received 100 cases of unregistered cryptocurrency loan companies.
The cases were flagged using suspicious transaction data collected by the Financial Intelligence Unit between December 2023 and January 2024.
Looking ahead, the Financial Intelligence Unit intends to implement a new system designed to immediately stop suspicious virtual asset transactions before local prosecutors conduct investigations. The main goal of the system is to conduct preliminary tests of its implementation by March this year.
Increased scrutiny
The report’s release coincides with South Korea’s increased regulation of the sector, sparked by several notable failures in 2023.
As part of efforts to increase transparency and accountability in the public sector, senior public officials in the country must now disclose their digital asset holdings under new legislation announced by the Ministry of Personnel Management.
Recently, South Korean customs revealed that about 88% of illegal foreign exchange transactions involved digital assets, some of which used cryptocurrencies to evade taxes. In response, customs authorities set up a special team aimed at combating cryptocurrency-related crimes. #加密诈骗 #韩国