FIU to Refine Regulatory Framework for Virtual Asset Service Providers

The Financial Intelligence Unit (FIU) announced on December 29 that it held the first meeting of the "Task Force for the Advancement of the Act on Reporting and Using Specified Financial Transaction Information" at the Government Complex Seoul in Jongno-gu, Seoul.

The task force, which will be held regularly, is set to focus on refining the regulatory framework for virtual asset service providers, enhancing alignment with the international standards of the Financial Action Task Force (FATF), and improving anti-money laundering inspection and sanction measures.

First, the FIU plans to refine the regulatory framework for virtual asset service providers. It will expand the obligation to provide information (the "travel rule") during virtual asset transfers and establish anti-money laundering measures to address regulatory and environmental changes, such as the institutionalization of stablecoins. Accordingly, the scope of the travel rule, which currently applies only to transactions of 1 million won or more, will be expanded to cover transactions of 1 million won or less as well.

The FIU also plans to enhance alignment with international standards in preparation for the FATF mutual evaluation. In accordance with FATF standards, the FIU will introduce a system to freeze accounts suspected of being used for criminal activities to prevent criminal funds from being withdrawn during investigations, and will discuss introducing anti-money laundering frameworks for lawyers, accountants, and tax accountants.

The FIU will also supplement the inspection and sanction system for anti-money laundering. Plans will be developed to improve the effectiveness of the anti-money laundering system and to strengthen the rationality and fairness of inspections and sanctions.

An FIU official stated, "The task force for amending the Act on Reporting and Using Specified Financial Transaction Information will be held twice a month on a regular basis," adding, "Based on the discussions, we plan to prepare measures to improve the anti-money laundering system within the first half of this year."