Concerns over money laundering and other illicit activities in Korea’s virtual asset market are once again on the rise. According to data from the Financial Intelligence Unit (FIU), a total of 36,684 suspicious transaction reports (STRs) related to cryptocurrencies were filed between January and August this year. This figure has already surpassed last year’s total and marks an all-time high.
Not only the number of reports but also the scale of transactions has expanded significantly. Cases refe2rred to prosecutors show that the amount of illicit funds reached approximately 9.56 trillion won. The majority involved underground remittances used for illegal overseas transfers, while other cases included the use of stablecoins to move funds and transactions linked to wallet addresses associated with voice phishing and online fraud. The rise of cross-border fund flows and unlawful uses is exposing the limitations of existing systems.
Authorities are tightening regulations on virtual asset service providers (VASPs), such as exchanges and wallet operators. Since the beginning of this year, standards for monitoring abnormal transactions have been strengthened, and exchanges are increasingly adopting artificial intelligence (AI)-based detection systems and real-time monitoring. In particular, with large-scale underground remittances and overseas transfers increasing rapidly, regulators plan to intensify enforcement by linking the Foreign Exchange Transactions Act with digital asset laws.
Some market observers see this as the downside of Korea’s growing cryptocurrency trading volume. As investment enthusiasm rises, so too does the potential inflow of illicit funds. Experts stress that beyond punitive measures, Korea urgently needs to build proactive monitoring systems and establish technical and institutional safeguards to improve transaction transparency.
The recent surge in suspicious transactions is being viewed as a stark reminder of the challenges Korea must resolve as its digital asset market moves toward integration into the regulated financial sector. Without simultaneous advances in regulation, technology, and international cooperation, concerns over money laundering may remain a persistent threat to market trust.
