South Korea's AML Rule Changes Pose Significant Regulatory Risk to Crypto Exchanges

South Korea's cryptocurrency industry is bracing for a potential surge in regulatory scrutiny following proposed anti-money laundering (AML) rule changes.

The Digital Asset eXchange Alliance (DAXA), representing 27 registered virtual asset service providers, has voiced concerns over the plan to flag overseas-linked crypto transfers above 10 million won as suspicious transactions automatically.

DAXA warns that this could push suspicious transaction reports from five major exchanges from 63,408 cases last year to a staggering 5.4 million, an 85-fold increase that may be challenging for daily operations to handle.