FIU to Sanction Top Korean Crypto Exchanges in AML Crackdown
South Korea’s Financial Intelligence Unit (FIU) is ramping up anti-money laundering (AML) compliance with on-site inspections of Korbit, Gopax, Bithumb and Coinone since 2023. After fining Dunamu (Upbit operator) 35.2 billion KRW under the Virtual Asset User Protection Act in 2024, the FIU will apply a first-in, first-out system to impose institutional and personal sanctions—ranging from heavy fines to disciplinary actions—potentially totaling hundreds of billions of won. Sanctions are now expected by mid-2025, earlier than initially projected, as part of a broader regulatory push to strengthen AML and KYC checks, protect investors and enhance cross-border transaction monitoring. Traders should monitor rising compliance costs, tighter business limits and possible trading volume impacts as this AML crackdown intensifies.
Bearish
This intensified AML crackdown by the FIU raises compliance costs and imposes stricter business limits on major Korean exchanges, which can reduce trading volumes and liquidity in the short term, applying downward pressure on the market. While improved AML and KYC checks may enhance market integrity over the long term, the near-term effect is likely bearish as traders adjust to higher costs and operational constraints.