S.Korea Crypto Money Laundering Soars Nearly 50% in 2023

South Korea received nearly 50% more reports last year of cryptocurrency transactions potentially tied to money laundering, market abuse and other illicit dealings.

Key Insights

  • South Korea received 16,076 suspected crypto money laundering case reports in 2023, up 48.8% from 2022
  • Financial Intelligence Unit referred 90% more potential virtual asset crimes to prosecutors
  • Customs team formed as some use crypto to conceal illegal foreign exchange settlements

SEOUL (MarketsXplora) – South Korean authorities received 16,076 reports last year of cryptocurrency transactions suspected of involvement in money laundering, tax evasion, and other financial crimes, up nearly 50% from 2022, data showed on Wednesday.

The Financial Intelligence Unit (FIU), tasked with monitoring suspicious transactions, said it referred 90% more potential virtual asset crimes to law enforcement than the prior year as coordination with crypto companies improves.

Authorities plan to implement a system by March that can instantly halt dubious crypto transfers for further investigation – before liquidation – as part of efforts to better monitor the sector, the FIU said in its annual report.

Separately on Wednesday, customs authorities announced the formation of a dedicated team focused on cryptocurrency crimes, which accounted for some 88% of all illegal foreign exchange transactions detected last year.

Some groups were found converting illegal funds into crypto assets to more easily transfer value overseas and conceal tax violations, the Korea Customs Service said according to Yonhap news agency.

Read also! South Korea to Regulate Fungible NFTs as Cryptocurrencies

Regulators continue to warn that those caught manipulating virtual asset prices or breaching capital controls face severe punishment, including potential life imprisonment, when South Korea’s new investor protection law takes effect mid-year.

The heightened scrutiny follows a string of recent large crypto scandals and collapses, hammering retail traders especially hard in one of the world’s most crypto-active trading populations.

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