South Korea Crypto AML Proposal Faces Industry Backlash

DAXA Warns Reporting Surge Under New AML Rules

DAXA, representing 27 registered VASPs including Upbit, Bithumb, Coinone, Korbit, and Gopax, has warned that proposed AML amendments could sharply increase reporting burdens. Under draft rules by the Financial Services Commission (FSC) and Financial Intelligence Unit (FIU), all overseas-linked virtual asset transfers of 10 million Korean won ($6,800) or more would be classified as suspicious transactions, regardless of risk signals. Estimates suggest this could push suspicious transaction reports from 63,000 cases last year to over 5.4 million annually. The group argues requirements to verify information accuracy and expand reporting obligations go beyond the law and could overwhelm compliance systems.

Regulatory Timeline and Scope of Proposal

The proposal was issued on March 30 and remains under public notice until May 11, with final regulatory and legal review expected in July.

Legal Challenges Add Pressure on Exchanges

Legal challenges are also ongoing. Upbit operator Dunamu previously won a ruling on April 9 canceling a three-month partial suspension, though regulators appealed on April 30. Bithumb also secured a court suspension of its six-month business penalty, while Coinone faces a 5.2 billion won fine and AML allegations tied to transactions with unregistered overseas VASPs.