The South Korean government is mulling over sanctions on crypto-mixing services, drawing inspiration from the U.S. The Financial Intelligence Unit (FIU) is in early discussions about regulations to curb the misuse of mixing services for illicit activities, a move following the U.S.’s footsteps in imposing sanctions against prominent crypto mixers.
South Korea’s financial regulator, the FIU, is exploring the implementation of sanctions on crypto-mixing services, mirroring actions taken by the U.S. This comes in response to the rising use of mixers for illicit money laundering. The FIU has initiated talks on potential regulations, with the process expected to take some time.
Discussions were ignited in South Korea following the U.S.’s imposition of sanctions on crypto mixers. An FIU official disclosed that the deliberations are in the early stages, and the U.S. is actively engaged in the conversation.
Crypto mixers, designed to enhance privacy, have inadvertently become a favored method for scammers and hackers to launder stolen funds. The U.S. government, recognizing the severe money laundering risks associated with mixers, previously imposed sanctions. Notably, Tornado Cash faced sanctions in August 2022, followed by Sinbad in November 2023, with allegations of North Korean ties.