South Korean Crypto Exchanges Report 49% Increase In Crypto Crime In 2023, Flagging 16,000 Transactions

According to the Financial Intelligence Unit (FIU), South Korean cryptocurrency exchanges flagged over 16,000 transactions to authorities in 2023, representing a substantial increase of 49% from previous years. 

According to the report, compared to 2022, South Korean authorities received 48.8% more reports of suspicious transactions from cryptocurrency service providers last year.

“The number of suspected crypto crime cases reported to the FIU increased by approximately 90% in 2023 compared to the previous year”

The FIU attributed this increase to heightened communication between authorities and local firms, encouraging them to report suspicious activities related to money laundering, market manipulation, and illegal trading practices. 

“The FIU is largely concentrating its financial information analysis capabilities to strengthen its role in detecting and notifying law enforcement agencies of crimes that violate the public’s livelihood.”

Read Also: South Korean Police Break Up “International Crypto Fraud” Ring, Seizing $1.2 Million

Financial Intelligence Unit’s Response and Future Strategies

In response to the surge in suspicious transactions, the FIU announced plans to establish a new system to suspend potentially illicit virtual asset transactions pending investigation by law enforcement agencies. 

This proactive approach reflects how hard the FIU is trying to enhance regulatory oversight and crack down on financial crimes in South Korea.

Moreover, the Korea Customs Office has also intensified its efforts to combat cryptocurrency-related crimes, with reports indicating that a significant portion of illegal foreign exchange transactions involve virtual assets. 

The customs authority has formed a dedicated team investigating cryptocurrency-related offenses to address this issue.

“Approximately 88% of illegal foreign exchange transactions involved virtual assets, highlighting the need for robust measures to combat financial crimes in the digital asset space”

Looking ahead, the FIU outlined its strategic priorities 2024, which include enhancing inspection procedures for financial firms and implementing robust anti-money laundering measures. 

The agency also emphasized the importance of user protection and announced plans to deploy an advanced AML system aligned with international standards.

The Financial Intelligence Unit (FIU) of South Korea has outlined its efforts to tackle the surge in cryptocurrency-related crimes and its plans for enhancing regulatory oversight in the coming year.

The new act released last week has penalties that could lead to lifetime imprisonment for individuals involved in illicit crypto gains exceeding $3.7 million and fines exceeding the illegal gains.

Read More: South Korea Tightens Grip on Crypto With Stricter Regulations and Penalties.