The Korea Financial Services Commission advances the cryptocurrency asset freezing system to prevent money laundering and fund transfers

【Blockchain Rhythm】South Korea’s financial authorities are taking new actions. On January 6th, the Korean Financial Committee is actively planning to introduce a “payment freeze” system, aiming to directly freeze suspicious accounts at an early stage of suspected manipulation of crypto asset prices, preventing criminals from secretly transferring or hiding illegal gains during investigations.

This system is actually a direct copy of the model from April last year—at that time, they revised the Capital Markets Act to introduce an account freeze mechanism targeting stock price manipulation. The current idea is to apply the same logic to the crypto asset sector.

According to the minutes of the Financial Committee’s meeting in November last year, several members expressed support and even suggested including this mechanism in the second phase of the crypto asset legislation. Their concerns are quite realistic: crypto assets are too easily transferred to personal wallets, and once inside the private key domain, they are almost impossible to recover.

What is the current problem? Regulatory authorities can block deposits and withdrawals on trading platforms, but if funds are transferred to traditional financial institutions, there is room for evasion. The purpose of the new system is to act before criminals can do so, using freeze measures to quickly lock assets and pave the way for subsequent recovery. This is a positive development for market order and investor protection.