The South Korean cryptocurrency industry collectively opposes the new anti-money laundering regulations and plans to require that all overseas transfers exceeding 10 million won be reported as suspicious transactions

The Korean cryptocurrency industry group DAXA (Digital Asset Exchange Alliance), representing 27 registered virtual asset service providers (VASP), has submitted objections to the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU) regarding the proposed amendments to the enforcement decree of the Specific Financial Information Act.

The new regulations aim to require domestic VASPs to report any virtual asset transfers with foreign VASPs as suspicious transaction reports (STR) whenever the amount reaches 10 million won (approximately 6,800 USD), regardless of the risk level. DAXA warns that this will cause the annual reporting volume of South Korea's five major trading platforms (Upbit, Bithumb, Coinone, Korbit, Gopax) to surge 85 times from last year's approximately 63,000 cases to over 5.4 million cases, making compliance practically impossible.

The industry also opposes the proposed requirement to verify the accuracy of customer information, arguing that the subordinate rules impose obligations not clearly defined by law. This industry backlash comes as exchanges confront financial regulators in court. On April 9, the court ruled to lift part of the business suspension against Upbit operator Dunamu, but regulators have appealed. On April 30, the court suspended the six-month partial business suspension against Bithumb. Coinone also received a temporary stay of execution.

The public consultation period for the new regulations ends on May 11, and it is expected to be finalized in July after regulatory and legal reviews. This highlights the tension between South Korea's tightening cryptocurrency anti-money laundering regulations and the industry's concerns about excessive compliance burdens.