South Korea Tightens Crypto Oversight with Expanded Travel Rule and Preemptive Freezes

South Korea's Financial Services Commission (FSC) is implementing aggressive new measures to combat cryptocurrency-related money laundering. Chairman Lee Eok-won announced a significant expansion of the VIRTUAL Asset Travel Rule during the 19th Anti-Money Laundering Day ceremony on November 28.

The reforms will lower the reporting threshold from ₩1 million ($680) to cover nearly all transactions, closing a loophole that allowed criminals to structure payments beneath the current limit. Simultaneously, the FSC will prohibit individuals with serious criminal records from holding major stakes in virtual asset firms.

Most notably, regulators are developing a preemptive account freeze system slated for implementation in 2024's first half. This mechanism will enable authorities to immobilize suspicious funds before illicit transactions are completed.