South Korea plans to crack down on cryptocurrency mixers with new regulations
South Korean financial authorities are considering introducing special regulatory measures for cryptocurrency mixers to prevent the misuse of these protocols by criminal organizations for money laundering, local media reported on January 15.
The move stems from growing concern that mixers originally designed to protect privacy are increasingly being exploited for illegal financial activities.
South Korea’s Financial Services Commission’s Financial Intelligence Unit (FIU) is leading the review of potential regulatory frameworks.
Agitators under fire
Cryptocurrency mixers, or tumblers, fragment and shuffle digital assets together, redistributing them to multiple wallet addresses, thus obscuring the trace of transactions and user identities.
Although these services were originally intended to protect the privacy of users with significant amounts of money, they have become a means of laundering money for criminals, including hackers.
According to a Financial Intelligence Unit official, the absence of specific sanctions against mixers in South Korea has led to a significant risk that they will be used to launder funds. Proposed regulations could restrict virtual asset service providers from engaging in mixer-based transactions.
Professor Hwang Seok-jin from the Institute of Information Security at Dongguk University emphasizes the importance of new regulations to prevent stolen assets from being converted into cash through exchanges and maintain market integrity.
The urgency of these measures domestically stems from the recent hacking of the Orbit Bridge. Hackers used the protocol to steal approximately $81 million in various digital assets suspected of being laundered through mixers.
international cooperation
This move is in line with international trends and regulatory actions by other authorities, such as the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which recently created Anti-Money Laundering (AML) regulations targeting mixers.
Following this, the regulator imposed sanctions on crypto mixer Sinbad, which is frequently used by North Korean hacking group ‘Lazarus’ to launder stolen funds.
There is a growing global consensus on blenders needing regulatory intervention, primarily to stop their misuse by illegal actors. However, given the cross-border nature of mixer use, it may take time to establish concrete regulatory frameworks due to the novelty of the debate and the need for international coordination.
The Financial Intelligence Unit said it plans to monitor the situation in other countries and aims to cooperate intensively with international regulators to curb the misuse of blenders.
#South #Korea #plans #crack #cryptocurrency #mixers #regulations
South Korean financial authorities are considering introducing special regulatory measures for cryptocurrency mixers to prevent the misuse of these protocols by criminal organizations for money laundering, local media reported on January 15.
The move stems from growing concern that mixers originally designed to protect privacy are increasingly being exploited for illegal financial activities.
South Korea’s Financial Services Commission’s Financial Intelligence Unit (FIU) is leading the review of potential regulatory frameworks.
Agitators under fire
Cryptocurrency mixers, or tumblers, fragment and shuffle digital assets together, redistributing them to multiple wallet addresses, thus obscuring the trace of transactions and user identities.
Although these services were originally intended to protect the privacy of users with significant amounts of money, they have become a means of laundering money for criminals, including hackers.
According to a Financial Intelligence Unit official, the absence of specific sanctions against mixers in South Korea has led to a significant risk that they will be used to launder funds. Proposed regulations could restrict virtual asset service providers from engaging in mixer-based transactions.
Professor Hwang Seok-jin from the Institute of Information Security at Dongguk University emphasizes the importance of new regulations to prevent stolen assets from being converted into cash through exchanges and maintain market integrity.
The urgency of these measures domestically stems from the recent hacking of the Orbit Bridge. Hackers used the protocol to steal approximately $81 million in various digital assets suspected of being laundered through mixers.
international cooperation
This move is in line with international trends and regulatory actions by other authorities, such as the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which recently created Anti-Money Laundering (AML) regulations targeting mixers.
Following this, the regulator imposed sanctions on crypto mixer Sinbad, which is frequently used by North Korean hacking group ‘Lazarus’ to launder stolen funds.
There is a growing global consensus on blenders needing regulatory intervention, primarily to stop their misuse by illegal actors. However, given the cross-border nature of mixer use, it may take time to establish concrete regulatory frameworks due to the novelty of the debate and the need for international coordination.
The Financial Intelligence Unit said it plans to monitor the situation in other countries and aims to cooperate intensively with international regulators to curb the misuse of blenders.
#South #Korea #plans #crack #cryptocurrency #mixers #regulations
