Korean crypto exchanges oppose AML rule on ₩10M reports

Twenty-seven registered South Korean crypto operators filed a joint objection on April 29 to proposed anti-money-laundering rules that would require reporting every transaction above ₩10 million to the Financial Intelligence Unit. The Digital Asset Exchange Alliance, which represents the five major exchanges and 22 smaller licensed operators, submitted the objection through the Korea Legislation Research Institute public comment portal.

Under the proposed amendment, transactions over ₩10 million (about $6,800) would be treated as inherently suspicious and trigger mandatory suspicious transaction reports to the FIU. DAXA estimates the change would raise filings by the five largest exchanges from 63,408 last year to nearly 5.5 million, an increase of about 85 times.

DAXA also objected to a new requirement that would force crypto operators to verify the accuracy of customer identification data, a separate verification layer the group says goes beyond the current law. The proposed rules would allow full business suspension for exchanges that fail to follow the customer verification procedures, while comparable violations by banks or other financial firms typically result in fines.

South Korea’s existing anti-money-laundering law, the Specific Financial Information Act, requires crypto operators to file suspicious transaction reports only when they have reasonable grounds to suspect illicit activity. The amendment would replace that suspicion-based standard with a transaction-based trigger.

Regulators have tightened oversight of the crypto sector in recent months. The Financial Services Commission introduced a requirement that major exchanges reconcile internal ledgers with actual holdings every five minutes after an error at Bithumb in February resulted in an accidental payout of 620,000 bitcoins instead of 620,000 won. The Financial Intelligence Unit imposed a six-month partial business suspension and a 36.8 billion won fine on Bithumb for about 6.65 million alleged AML violations; a Seoul court later paused the suspension after Bithumb filed an injunction. Dunamu, operator of Upbit, successfully challenged a three-month suspension in court, and Coinone is contesting its sanctions.

Floor leader Song Eon-seok of the opposition People Power Party told exchange executives earlier this year that taxing crypto gains while abolishing the equivalent tax on stock investments ‘amounts to unfair treatment,’ attendees reported.

The public comment period for the proposed rules closes May 11. The amendments will then be reviewed by the Regulatory Reform Committee and the Ministry of Government Legislation, with the government targeting a final cabinet vote in July. If approved, some parts could take effect as soon as August 20, 2026, and other elements could be phased in beginning in early 2027. Exchanges and industry groups are expected to press their objections during the remaining comment window and the regulatory review process.