South Korea Seeks Regulation Against Crypto Mixers Citing Illegal Use Cases
South Korean regulators seek to introduce new laws that would sanction the use of cryptocurrency mixers in the country to curb the rate of illicit financial activities.
According to local news outlets, the Financial Intelligence Unit is considering rolling out new regulations similar to those of the United States for digital asset mixing services.
The reasons given for the incoming regulations are due to abuse of the service from bad actors engaging in money laundering and other illegal services.
Officials from the agency say this is a growing concern because there is currently no law to sanction the activities of mixers in the country.
“We sympathize with the problem that there is a high risk of money laundering through mixers… If virtual assets are transferred to a mixer, tracking funds and monitoring crimes is difficult.”
As a result, the financial watchdog revealed that the need to restrict and cover transactions by coin mixers is being discussed, adding that talks began in South Korea when the United States took action against digital assets mixing services.
Per the report, mixers have limited authorities from tracing stolen funds of several hackers as they move them around on exchange without the platforms being able to flag them.
While incidents using crypto mixers are reported globally as hacks and bridge attacks are recorded, some local cases have made regulators a lot more concerned about investor protection and going a step ahead of bad actors.
The recent Orbit Bridge incident described as the first hack to 2024 that saw losses of over $81 million is an example of the use of crypto mixers to mask transactions to numerous wallets.
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