South Korea to Investigate Dubious Transfers from Crypto Exchanges: Billions Under Scrutiny

South Korean financial authorities have launched a major investigation into suspicious money transfers facilitated by cryptocurrency exchanges operating within the country. The probe focuses on potentially illegal "foreign exchange outflow" and money laundering activities routed through these platforms, impacting several major banks and exchanges.

According to a local South Korean news outlet, Asia Time, the Financial Supervisory Service (FSS) has ordered a probe into banks that facilitated $6.5 billion in potentially illicit transactions. This investigation aims to uncover the nature of these transfers and whether they violate South Korean financial regulations.

The financial authorities of South Korea are considering countermeasures against those crypto exchanges that operate in the country without complying with the strict regulatory framework. Compliance with these regulations is paramount to ensuring the integrity of the financial system and preventing illicit activities. The FIU has been actively encouraging crypto exchanges to report any transactions that raise suspicions of money laundering and illegal “foreign exchange outflow.” As a result, the number of suspicious activity reports filed by exchanges has increased significantly.

Earlier this week, South Korean prosecutors launched a formal investigation into Bithumb, one of the country’s largest cryptocurrency exchanges, over allegations that are currently undisclosed but believed to be related to financial irregularities. This investigation underscores the increasing scrutiny facing crypto exchanges in South Korea.

The outcome of these investigations could have significant implications for the future of cryptocurrency trading in South Korea. Stricter regulations and increased enforcement are expected as authorities seek to curb illicit financial flows and protect investors.