South Korean Regulator Plans to Look at Stablecoins' Role in Money Laundering: Report

The country's Financial Services Commission considers stablecoins to be highly susceptible to money laundering, according to a new report.

By Jamie Crawley

Oct 24, 2022 at 1:38 p.m. UTC

Updated Oct 24, 2022 at 3:40 p.m. UTC

CDCROP: South Korean flags (Daniel Bernard/Unsplash) — South Korea (Daniel Bernard/Unsplash)

Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

Follow @JamieCrawleyCD on Twitter

South Korea's Financial Services Commission (FSC) intends to look into the proportion of stablecoins being used on crypto exchanges to prevent money laundering, local news agency News1 reported Monday.

The FSC's "Risk Assessment Index Development, Improvement, and Application Methods Study for New Business Areas" report said that financial authorities consider stablecoins to be highly susceptible to money laundering.

The regulator has therefore established a position that it should look into the proportion of stablecoins being used on exchanges as a means of addressing the threat of money laundering, according to News1's report.

South Korean authorities have been proactive with regard to digital assets in recent years, with some 13 crypto-related bills awaiting debate in the country's parliament as of August.

In June, the South Korean government set about forming a committee specifically to oversee the digital assets market, prompted by the collapse of the Terra network. Around 280,000 South Koreans were believed to have been victims of the plunge in the value of the Terra stablecoin UST and its sister token LUNA.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.