FIU Discusses Anti-Money Laundering Systems and Customer Asset Custody Status with 5 Major Exchanges

[Asia Economy Reporter Lee Jung-yoon] The Financial Intelligence Unit (FIU) under the Financial Services Commission announced on the 16th that it discussed the domestic cryptocurrency exchanges, anti-money laundering systems, and the status of customer asset custody and management.

The meeting held that day was attended by the FIU and the CEOs of the five major domestic virtual asset service providers: Dunamu, Bithumb, Coinone, Korbit, and Streami.

According to the FIU, the representatives stated that transparency regarding cryptocurrency transfers has increased while complying with the Travel Rule, which has been in effect since March 25. They also explained that by operating whitelist and blacklist systems, transactions with high-risk traders are being blocked. The Travel Rule is a system designed to track the movement of cryptocurrencies. The whitelist system allows external withdrawals only when the sender’s and receiver’s information matches for verified exchanges and wallet addresses, while the blacklist system restricts withdrawals from high-risk wallet addresses.

In particular, the representatives explained that they continuously monitor and block wallet addresses used in mixers, which split and mix cryptocurrencies to make the source and tracking of funds difficult. The FIU urged that transaction patterns be reviewed and effective suspicious transaction extraction criteria be established and strengthened to prevent money laundering activities involving users sending funds through personal wallets to high-risk countries or traders.

Furthermore, regarding customer asset custody, the FIU requested efforts to build a system that can verify custody information in real time and to monitor the safety of transaction support for cryptocurrencies issued by virtual asset service providers themselves.

Additionally, the FIU stated that it will closely monitor the FTX incident and support discussions on necessary user protection measures during the National Assembly’s bill review process.

The representatives said that in Korea, under the Act on Reporting and Using Specified Financial Transaction Information (the Specified Financial Transaction Information Act), customer deposits are strictly segregated and managed by banks issuing real-name accounts, customers’ cryptocurrencies are periodically audited and publicly disclosed, and the issuance of cryptocurrencies by service providers is restricted, making it difficult for incidents like FTX to occur domestically.

Park Jung-hoon, head of the FIU, said, "We requested the establishment of a more effective anti-money laundering system, including the training of anti-money laundering experts for virtual asset service providers, enhancement of dedicated organizational capabilities, and strengthening of internal control measures," adding, "We will continue to provide opportunities for communication regarding the status and key issues of the virtual asset market in the future."

This content was produced with the assistance of AI translation services.