South Korea Crypto AML Proposal Sparks Hefty Regulatory Burden

South Korea's crypto industry is bracing for a potential onslaught of regulatory pressure with proposed anti-money laundering rule changes. The plan, which would flag overseas-linked crypto transfers above 10 million won as suspicious transactions automatically, has sparked concerns among local exchanges.

The Digital Asset eXchange Alliance (DAXA), which represents 27 registered virtual asset service providers including Upbit and Bithumb, submitted comments on the planned changes. The group argued that the proposal goes beyond setting standards and creates a new reporting duty through lower-level rules.

DAXA warned that the proposed rules could push suspicious transaction reports from the five largest exchanges from 63,408 cases last year to 5,445,133 cases. This would mark an 85-fold increase and may be difficult for daily operations.