The South Korean Cryptocurrency Industry Collective Opposes Anti-Money Laundering Regulation, Proposing that All Outbound Transfers over 10 Million KRW Be Reported as Suspicious Transactions

May 4 (Yonhap News) — South Korea’s Digital Asset Exchange Association (DAXA), representing 27 registered Virtual Asset Service Providers (VASPs), has filed objections with the Financial Services Commission (FSC) and Financial Intelligence Unit (FIU) over proposed amendments to the Enforcement Decree of the Specific Financial Information Act. The new rules would require domestic VASPs to submit Suspicious Transaction Reports (STRs) for all cross-border virtual asset transfers with overseas VASPs exceeding 10 million Korean won (≈$8,600) — regardless of risk level. DAXA warns this would send annual STR volumes for the country’s top five exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) soaring from roughly 63,000 last year to over 5.4 million, making compliance practically unfeasible. The industry also pushes back against proposed customer information accuracy verification requirements, arguing the draft imposes obligations not clearly defined in law. The backlash comes amid ongoing legal clashes between exchanges and regulators: On April 9, a court revoked part of a business suspension penalty against Upbit operator Dunamu, though regulators have appealed. On April 30, courts suspended a 6-month partial suspension for Bithumb; Coinone also secured a temporary stay. Public comments on the proposed rules are open through May 11, with finalization expected in July after regulatory and legal reviews. The dispute highlights tensions between South Korea’s tightening crypto anti-money laundering (AML) regulations and industry concerns over excessive compliance burdens.