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In 2023, Suspicious Transactions Reported by South Korean Crypto Exchanges Increased by 50%

Suspicious

The Financial Intelligence Unit (FIU) of South Korea has reported a 49% increase in suspicious transactions from local virtual asset exchanges in 2023 compared to 2022. This information was part of the FIU’s Work Plan for 2024, released on February 14, which included key data and strategic initiatives for overseeing the crypto market.

The FIU has been urging crypto exchanges to report transactions that could potentially involve money laundering or illegal foreign exchange outflows. This led to a significant increase in reports from local crypto exchanges, with 16,076 cases reported in 2023, up from 10,797 in 2022. In contrast, the total number of suspicious transactions, including those involving crypto assets, saw a modest increase of 10.2%.

The FIU also noted a roughly 90% year-on-year increase in notifications about suspected crypto crimes in 2023. However, due to the Specified Financial Information Act, the FIU did not disclose further details about these notifications or clarify whether they also came from crypto exchanges.

In related news, Japan’s regulator has suggested halting peer-to-peer transfers from fiat to crypto.

The FIU has also reported 100 instances of unregistered crypto loan businesses to the National Tax Service and the National Police Agency. These cases were identified based on suspicious transaction data collected by the FIU in December 2023 and January 2024.

In 2024, the FIU plans to strengthen its crypto team and provide necessary training. It also intends to launch a virtual asset analysis system to track and analyze details of virtual asset transactions and their complex movement paths.

Prior to the FIU’s official announcement, The Korea Times reported that the agency planned to implement a preemptive trading suspension system for suspicious transactions on existing South Korean platforms. This system would freeze transactions even during the pre-investigation phase, a move confirmed in the latest release.

On February 7, the Financial Services Commission, another Korean regulator, announced that crypto criminals who make more than $3.8 million in illegal profits could face life imprisonment.

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