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South Korea\u2019s Digital Asset Exchange Alliance (DAXA), representing 27 registered virtual asset service providers, has lodged formal objections with the Financial Services Commission and the Financial Intelligence Unit over proposed amendments to the enforcement decree of the Specific Financial Information Act.<\/p>\n
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Under the draft rules, domestic exchanges would have to file a suspicious transaction report for any transfer to a foreign VASP once it hits 10 million won, regardless of risk indicators or counterparties, effectively turning a value threshold into an automatic suspicion trigger.<\/p>\n
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DAXA argues this approach ignores the \u201clow\u2011risk transactions allowed, high\u2011risk transactions restricted\u201d principle laid out in the FIU\u2019s own legislative notice and instead forces exchanges to flag vast numbers of routine cross\u2011border transfers as suspicious.<\/p>\n
The alliance estimates that at the country\u2019s five major platforms \u2014 Upbit, Bithumb, Coinone, Korbit and Gopax \u2014 annual STR filings would jump 85\u2011fold from about 63,000 cases last year to over 5.4 million, a surge it says would overwhelm compliance teams and dilute meaningful AML signals.<\/p>\n
DAXA also opposes a proposed requirement that exchanges verify the accuracy of customer information beyond existing Know Your Customer duties, contending that the subordinate decree is trying to impose obligations \u201cnot clearly grounded in primary legislation.\u201d<\/p>\n
The industry pushback is unfolding as Korean exchanges fight separate sanctions in court.<\/p>\n
On April 9, a Seoul court sided with Dunamu, operator of Upbit, overturning a three\u2011month partial business suspension that the FIU imposed after alleging 44,948 transactions with 19 unregistered overseas platforms; the FIU has appealed.<\/p>\n
Bithumb won a similar ruling on April 30, when the court halted a six\u2011month partial business suspension tied to alleged violations of specific financial information rules, while Coinone has secured a temporary stay against a three\u2011month suspension and a 5.2 billion won fine over KYC shortcomings.<\/p>\n
The FIU\u2019s current consultation on the 10 million won reporting rule runs until May 11, after which the decree is expected to be finalized in July following regulatory and legal review, leaving little time for a compromise between tighter oversight and what exchanges describe as \u201cexcessive and operationally impossible\u201d compliance burdens.<\/p>\n
In a recent crypto.news\u00a0overview<\/a>, the 10 million won trigger was flagged as part of a broader push that could see major global platforms classified as high risk for Korean users.<\/a><\/p>\n Another crypto.news\u00a0analysis<\/a>\u00a0underscored how a \u201ccrypto law vacuum\u201d has left the FIU leaning on expansive interpretations of existing statutes, driving a wave of fines and suspensions now being tested in court.<\/a><\/p>\n