South Korea Pushes for Stricter Global Crypto Rules

South Korea is calling for tougher international regulations on cryptocurrency transactions. The country wants all crypto transfers, regardless of their value, to include mandatory identification of both the sender and the recipient.

The proposal was submitted to the Financial Action Task Force (FATF), the global body responsible for setting standards to combat money laundering and terrorist financing. The issue was discussed during the FATF meeting held in Paris from June 15 to June 19.

According to South Korean authorities, cryptocurrency regulations vary significantly between countries. They argue that these differences create loopholes that can be exploited to bypass rules and make it more difficult to combat financial crime.

Seoul is urging FATF members to require sender and recipient information for every cryptocurrency transfer. In many jurisdictions, including South Korea itself, such requirements currently apply only to transactions above a certain threshold.

South Korea plans to remove this threshold from its domestic market starting in August. At present, reporting requirements apply only to crypto transfers worth at least 1 million won, equivalent to roughly $730.

The regulator had initially proposed an additional rule that would require users to report cryptocurrency transfers exceeding 10 million won to foreign exchanges and private wallets. However, the crypto industry opposed the measure, arguing that it would be costly to implement and offer limited benefits. As a result, the government decided to abandon the plan.

The FATF meeting also addressed the growing use of cryptocurrencies by cybercriminals. Participants noted that digital assets are increasingly being used for money laundering and other illegal activities. They also warned that artificial intelligence is helping criminals develop more sophisticated methods of concealing financial transactions.

Another key topic was the expanding role of stablecoins in the global financial system. FATF representatives emphasized the need for stronger international cooperation to effectively supervise this rapidly growing segment of the crypto market.

If South Korea’s proposal is ultimately adopted by FATF member countries, cryptocurrency exchanges worldwide could be required to collect sender and recipient information for every transaction, including transfers of very small amounts.

The FATF also maintained its high-risk designation for North Korea, Iran, and Myanmar, keeping them under enhanced monitoring due to ongoing concerns related to money laundering and terrorist financing.