FIU Steps Up Efforts to Block Cross-Border Money Laundering Using Virtual Assets

Council Held on “Analysis and Response to Suspected Virtual Asset Transactions Involving Transnational Crime”
Virtual Asset Industry to Report Suspicious Transactions to the FIU

Going forward, the domestic virtual asset industry will also provide suspicious transaction information to the Financial Intelligence Unit (FIU) so that evidence of criminal activities detected during virtual asset transactions can be utilized in investigations.

The FIU, under the Financial Services Commission, announced on December 7 that it held a council meeting on “Analysis and Response to Suspected Virtual Asset Transactions Involving Transnational Crime,” presided over by Yoon Young-eun, Director of System Operations and Planning at the FIU. The meeting was attended by the heads of the FIU’s Virtual Asset Inspection Division and System Operations Division, as well as representatives from the virtual asset industry, AML officers, and the Digital Asset Exchange Association (DAXA).

It is estimated that criminal organizations operating in border areas of Cambodia and Southeast Asian countries (used as drug trafficking routes) are engaging in money laundering by utilizing numerous external virtual asset wallets that are difficult to verify with real names, or by opening virtual asset trading accounts under the names of victims who have been kidnapped or lured.

The virtual asset industry has decided to submit Suspicious Transaction Reports (STRs) to the FIU after conducting detailed analyses of accounts suspected of being used for criminal activities, along with any criminal evidence. The reported suspicious transactions will be analyzed by the FIU and then used by law enforcement agencies such as the prosecution and police for investigating criminal organizations and confiscating illicit funds.

Additionally, for customers suspected of being involved with Southeast Asian criminal funds and identified through this suspicious transaction reporting, the source of funds and purpose of transactions will be immediately verified. If verification cannot be completed due to insufficient explanation, transactions will be restricted to block the inflow and outflow of Southeast Asian criminal funds in Korea.

At the meeting, Director Yoon Young-eun stated, “As money laundering techniques using virtual assets become more advanced and diverse, it is necessary for the domestic virtual asset industry to not only enhance its own monitoring capabilities but also to respond to cross-border virtual asset crimes through global AML cooperation. The FIU will strengthen collaboration with the Financial Action Task Force (FATF), overseas financial authorities, and will continue to communicate and support the industry.”

The FIU will continue to respond firmly to money laundering activities involving virtual assets and will also strengthen its own analytical capabilities to ensure that law enforcement agencies can promptly trace, freeze, and confiscate criminal funds.

In addition, the FIU plans to strengthen regulations on cross-border transactions by prohibiting transactions with overseas exchanges that pose a high risk of money laundering, in order to prevent blind spots in virtual asset transaction monitoring. Furthermore, the FIU will introduce a “Suspicious Account Suspension System” to prevent criminal funds in accounts suspected of being used for crimes from being withdrawn during investigations, and will continue to refine anti-money laundering regulations.

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