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The amended Korean Anti-Money Laundering law is no longer just a compliance issue for banks. It is rapidly becoming a core operational and governance issue for virtual asset businesses, fintech companies, and even certain professional service providers.

The revised Act on Reporting and Using Specified Financial Transaction Information (commonly referred to as Korea’s AML law or “Special Financial Transactions Act”) was promulgated on February 19, 2026, and is scheduled to take effect on August 20, 2026.

The amendments significantly strengthen AML obligations for Virtual Asset Service Providers (VASPs) and expand the overall compliance framework surrounding crypto-related transactions in Korea.

This article outlines the three most important AML changes businesses should understand before the new rules take effect.
 

What Is Korea’s “Special Financial Transactions Act” (특금법)?

Korea’s AML framework is governed by the Act on Reporting and Using Specified Financial Transaction Information, which establishes reporting, monitoring, and internal control obligations designed to prevent:

• Money laundering
• Terrorist financing
• Illicit use of financial systems

Under this framework, financial institutions and VASPs must identify suspicious transactions, verify customer information, maintain records, and implement internal AML controls.

In practical terms, the law is designed to prevent criminal proceeds from entering or moving through the Korean financial system.
 

1. Stronger KYC and Transaction Monitoring Requirements

The first major change is the expansion of customer due diligence and risk-based monitoring obligations.

Under the revised rules, financial institutions and VASPs will be expected to verify not only customer identity, but also:

• Source of funds
• Purpose of transactions
• Beneficial ownership (BO)
• Ongoing transaction behavior and risk profile

Electronic KYC (e-KYC), non-face-to-face identity verification, and real-time suspicious transaction detection systems are becoming effectively mandatory operational standards.

The revised framework also strengthens the Risk-Based Approach (RBA) and Enhanced Due Diligence (EDD) requirements for high-risk customers and transactions.

In other words, AML compliance in Korea is moving away from a simple “ID verification” model toward a continuous risk management model.

For crypto exchanges and fintech operators, this means AML systems must function as active monitoring infrastructure rather than passive onboarding procedures.
 

2. Expanded Reporting Obligations and Stronger Travel Rule Enforcement

The second major reform focuses directly on virtual asset transactions.

Stricter Entry Requirements for VASPs

Korean regulators are strengthening licensing and registration standards for virtual asset businesses. Proposed measures include enhanced screening of:

• Major shareholders
• Executives and management personnel
• Financial soundness and governance structures

The regulatory approach increasingly resembles traditional financial institution supervision.

Expanded Suspicious Transaction Reporting (STR)

Proposed amendments to the enforcement decree and supervisory regulations would effectively require mandatory suspicious transaction reporting (STR) for certain virtual asset transactions exceeding KRW 10 million.

The final regulations are expected to be confirmed around July 2026.

Expansion of the Travel Rule

Korea is also moving toward broader implementation of the Travel Rule.

The proposed changes would:

• Expand sender/recipient information transmission requirements
• Increase the scope of covered transactions
• Impose additional verification obligations on receiving VASPs

For VASPs operating in Korea, AML obligations are no longer limited to registration requirements. They are becoming a central factor affecting operational design, transaction processing, onboarding policies, and even fee structures.
 

3. Broader AML Accountability and Expansion to Professional Service Providers

The third major reform concerns governance, accountability, and expansion of regulated entities.

AML Officers Elevated to Executive-Level Responsibility

Korean regulators are pushing to formalize AML reporting officers as executive-level positions.

This means boards of directors and senior management will be expected to assume direct responsibility for AML governance and oversight.

AML compliance is increasingly treated as a corporate governance issue rather than merely an internal compliance function.

Formalization of AML Compliance Evaluations

The amendments would also codify AML system evaluations into law.

Participation in regulatory AML assessments may become mandatory, and penalties are expected for:

• Refusing to submit materials
• Providing false information
• Obstructing regulatory reviews

Expansion to DNFBPs

Korea is also formally considering AML obligations for Designated Non-Financial Businesses and Professions (DNFBPs), including:

• Lawyers
• Accountants
• Tax advisors

The government has indicated that further amendments aligned with FATF standards are under discussion for 2026.

This signals a broader regulatory trend: AML obligations are expanding beyond banks and crypto exchanges into the wider professional services ecosystem.
 

What Should Companies Prepare Before August 20, 2026?

With the revised law taking effect on August 20, 2026, companies have limited time to review and upgrade their AML frameworks.

Financial institutions, fintech operators, and VASPs should now assess:

• Internal AML policies and procedures
• KYC and monitoring systems
• Transaction screening capabilities
• Governance and reporting structures
• Travel Rule compliance processes
• Risk-based customer classification systems

For many businesses, the real legal risk will not come from the existence of AML obligations themselves, but from failing to implement operational systems that regulators consider “effective” in practice.

If your company is preparing for Korean AML compliance, virtual asset regulation, or VASP-related legal risk management, the Virtual Asset Team at Decent Law Firm can assist with regulatory analysis, compliance structuring, and AML framework reviews.