Government Attends FATF Plenary, Discusses Responses to Cyber Fraud and Virtual Assets

Adoption of Stablecoin P2P Risk Analysis Report
High-Risk Country Status Maintained for North Korea, Iran, and Myanmar

The government attended the plenary meeting of the Financial Action Task Force (FATF) to discuss responses to cyber fraud and major issues related to virtual assets.

The Korea Financial Intelligence Unit (FIU) under the Financial Services Commission announced on the 18th that it had discussed these issues at the 5th plenary meeting of the 34th FATF, which was held in Mexico City, Mexico, from the 9th to the 13th.

The FATF is an international organization established in 1989 for the purposes of anti-money laundering (AML) and countering the financing of terrorism (CFT). It is composed of 40 members, including 38 countries and 2 international organizations.

At this plenary meeting, the FATF adopted reports related to cyber fraud and virtual assets. The reports include support for countries to promote responsible technological innovation, while also supporting the use of risk-mitigation techniques to respond to evolving threats.

A report on virtual asset projects was also adopted. The FATF analyzed how criminals exploit gaps and inconsistencies in regulation and supervision, and presented response measures for national authorities. In addition, a separate report was adopted that analyzes new risks that may arise when stablecoins are transferred through peer-to-peer (P2P) transactions. The report covers how each country conducts stablecoin transactions and the status of the introduction of related AML regulations. These reports propose ways for the private sector and countries to mitigate risks in the virtual asset sector and are expected to help member states strengthen legal safeguards in response to these risks.

Sanction measures against countries that fail to implement FATF international standards were also discussed. It was decided that the high-risk country status of North Korea, Iran, and Myanmar, which have not implemented the international standards, would be maintained. In particular, it was pointed out that risks are increasing due to strategic deficiencies in Iran’s efforts to prevent terrorist financing and proliferation financing, and it was decided to expand the publication of a revised statement calling for the international community to strengthen its response.

The FIU stated, "Korea emphasized that cooperation with the private sector is important for the smooth implementation of FATF standards," adding, "In particular, it stressed that close cooperation between the private sector and supervisory authorities is essential to implement the standards based on the risk-based approach (RBA) and to enhance the effectiveness of supervision."