South Korea's 'First-In, First-Out' Approach to Crypto Intensifies AML Enforcement

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South Korea's 'First-In, First-Out' Approach to Crypto Intensifies AML Enforcement

Bitget-RWA2025/11/25 03:00

By:Bitget-RWA

- South Korea's FIU intensifies crypto AML enforcement, sanctioning exchanges like Upbit, Korbit, and Bithumb for compliance failures. - A "first-in, first-out" penalty model targets inspected exchanges sequentially, with Dunamu fined $24.35M and operational restrictions in November 2025. - Fines could reach tens of billions of won per platform, aiming to standardize global AML standards while delaying a crypto tax regime until 2027. - The crackdown faces mixed reactions, balancing stricter oversight with

South Korea's Financial Intelligence Unit (FIU) is intensifying its oversight of cryptocurrency exchanges, issuing penalties for shortcomings in anti-money laundering (AML) practices following a year-long review. After initially sanctioning Upbit operator Dunamu, the FIU has shifted its focus to Korbit, GOPAX, Bithumb, and Coinone, with

further penalties expected in the sequence

that matches the order of inspections since August 2024. This regulatory stance highlights South Korea's determination to bring its crypto industry in line with international AML requirements, despite

ongoing delays in rolling out a crypto tax policy

that have introduced uncertainty for the sector.

Dunamu was the first to be penalized in November 2025, receiving a 35.2 billion won ($24.35 million) fine and

a three-month ban

on accepting new deposits and withdrawals from customers. This action followed a warning issued to its CEO in February and was

prompted by over 700,000 AML breaches

, such as failures in KYC procedures and not reporting suspicious activities. Authorities have since indicated that

comparable fines and operational limits

are anticipated for the other exchanges, with Korbit and GOPAX next due to their inspections in October and December 2024. Bithumb, reviewed in March 2025, and Coinone, in April, may see their cases delayed as regulators

examine Bithumb's order-book processes

South Korea's 'First-In, First-Out' Approach to Crypto Intensifies AML Enforcement image 0

The FIU is using a "first-in, first-out" strategy, meaning exchanges inspected earlier will be penalized sooner, with

the entire process projected to finish

by mid-2026. Industry observers

expect each exchange to face fines in the tens of billions

of won, potentially amounting to hundreds of billions across the industry. These actions are part of South Korea's broader effort to unify AML standards and prevent regulatory loopholes, especially as the nation

gets ready to implement tougher investor safeguards

through its forthcoming virtual asset regulations.

The regulatory clampdown has sparked varied opinions. Some experts believe the penalties could alter the competitive environment by targeting platforms that fail to comply, while

others argue that tighter controls

could ultimately strengthen institutional trust in South Korea's digital asset market. Nevertheless,

this wave of enforcement coincides with persistent delays

in launching a crypto tax system, now pushed back to January 2027 due to infrastructure issues. This period of regulatory uncertainty has

fueled worries about capital outflows

and the possibility of traders shifting to less regulated markets.

South Korea's regulatory tactics reflect global movements in digital asset oversight, such as enforcement by the U.S. SEC and the EU's MiCA rules, but with a particular focus on rapid and significant penalties. The FIU's measures also reveal the challenge of balancing innovation with regulatory compliance, as

authorities weigh strict enforcement

against initiatives to foster blockchain growth via a new policy task force. For now,

the industry continues to face rigorous examination

, prompting exchanges to enhance their compliance systems to satisfy regulatory demands.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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