Korean regulatory authorities crack down on crypto exchanges: AML review reveals compliance gaps at the level of 273 million KRW

The Korean Financial Intelligence Unit (FIU) recently announced a strict regulatory enforcement decision. According to the investigation report released by the agency, a mainstream crypto exchange was fined 273 million KRW (approximately $1.88 million) due to significant deficiencies in anti-money laundering (AML) measures. The penalty stemmed from a special AML inspection conducted in mid-October, with the review period from October 16 to 29.

Major Findings in the AML Inspection

During this AML review, the regulatory authorities identified approximately 22,000 violations. The most serious issues centered around the Customer Identification Program (KYC), with over 12,800 cases of incomplete or incorrect customer information verification. Even more concerning, the exchange also executed over 9,100 transactions without sufficient review, directly violating fundamental AML requirements.

In addition, the investigation uncovered 19 instances of unregistered fund transfers between the platform and overseas virtual asset service providers. Notably, in 655 transactions involving NFTs, the exchange failed to conduct necessary AML risk assessments, indicating a severe lack of compliance awareness in emerging asset categories.

Further Regulatory Actions

In response to these issues, the FIU issued institutional warnings to the involved exchange and held meetings with its senior management, requiring personnel responsible for financial reporting to undergo administrative reprimands. These measures clearly demonstrate that Korean regulators are intensifying AML inspections of crypto market participants.

Industry Insights and Future Trends

This enforcement action reflects the Korean financial regulators’ firm commitment to strengthening AML compliance in the cryptocurrency sector. Industry insiders expect that more exchanges will face similar AML reviews and penalties in the future. Trading platforms need to carefully examine their customer identification processes, transaction monitoring mechanisms, and risk assessment systems to ensure compliance in an increasingly stringent regulatory environment.

This move indicates that the global crypto market’s compliance process is accelerating, and building robust AML systems has become a necessary condition for survival and growth.