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

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

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 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

on accepting new deposits and withdrawals from customers. This action followed a warning issued to its CEO in February and was , such as failures in KYC procedures and not reporting suspicious activities. Authorities have since indicated that 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 .

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

by mid-2026. Industry observers 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 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

could ultimately strengthen institutional trust in South Korea's digital asset market. Nevertheless, in launching a crypto tax system, now pushed back to January 2027 due to infrastructure issues. This period of regulatory uncertainty has 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

against initiatives to foster blockchain growth via a new policy task force. For now, , prompting exchanges to enhance their compliance systems to satisfy regulatory demands.