PANews reported on May 4 that, according to Cointelegraph, the Korea Digital Asset Exchange Alliance (DAXA), representing 27 registered virtual asset service providers (VASPs), submitted objections to the Financial Services Commission's (FSC) proposed amendments to anti-money laundering regulations.

The proposed new regulations would require domestic VASPs to submit Suspicious Transaction Reports (STRs) for virtual asset transfers between themselves and overseas VASPs exceeding 10 million Korean won (approximately US$6,800). DAXA points out that this requirement will significantly increase compliance pressure, for example, leading to a substantial surge in suspicious transaction reports on the five major cryptocurrency exchanges, making actual compliance difficult to achieve. DAXA also opposes the requirement to "verify customer information" in the new regulations, arguing that it is an additional obligation.

Furthermore, South Korean cryptocurrency exchanges are currently engaged in a legal battle with regulators over related sanctions, with major exchanges such as Upbit pursuing legal action to ensure their continued operation. Public consultation on the new regulations is still underway, with the final version expected to be reviewed and implemented in July. This industry opposition highlights the inherent contradiction between "strengthening compliance" and "reducing the burden on the industry" in South Korean cryptocurrency regulation.