The South Korean government is launching an unprecedented crackdown on the domestic payment industry. On July 25, the Financial Supervisory Service (FSS) announced that it had initiated disciplinary proceedings against 6 local payment gateway (PG) companies, on the grounds that these companies were suspected of providing payment services to illegal gambling, telecommunications fraud, and drug trafficking gangs, assisting in money laundering.
According to Newsis, although the names of the companies involved have not yet been disclosed, these institutions have been listed as "high-risk key monitoring targets" in FSS's transaction review. The regulatory body identified multiple suspicious capital flows through its data tracking system, followed by on-site raids that uncovered a large amount of illegal transaction evidence.
The FSS pointed out that the related payment platforms were not passive victims but were actively colluding with online gambling, telecom fraud, and drug traffickers, providing them with payment interfaces and financial channels, and collecting high commissions in return. Some platforms even disguised themselves as e-commerce businesses to covertly operate illegal gambling collections; others set up shell companies and fabricated financial statements to conceal real transactions.
Some cases have now been transferred to the prosecutorial authorities, and the senior executives involved may face up to 30 years of imprisonment. The FSS has taken a firm stance: "These platforms are not being exploited but are knowingly assisting and even guiding black industry operations, and their level of harm far exceeds ordinary financial illegal activities."
To plug the regulatory loopholes in the payment sector, the FSS announced it would implement several system reforms: including upgrading transaction data analysis systems, increasing the frequency of on-site inspections, and building a high-intensity law enforcement collaboration mechanism with the police. Additionally, the FSS will also push for new legislation to secure greater enforcement powers for regulatory authorities, thereby strengthening substantial control over the payment industry.
South Korea has always maintained a strict policy against gambling, with only a few legal channels (such as sports betting and High1 Casino) allowed, while all other forms are strictly prohibited. However, with the rapid spread of the internet and overseas gambling platforms, payment channels have become the most difficult to regulate, also serving as a "breakthrough" for money laundering and fraud crimes.
This regulatory storm sends a clear signal: South Korea is cleaning up illegal financial networks, with zero tolerance for gambling and fraud platforms. Industry insiders believe that this will not only profoundly affect South Korea's domestic payment ecosystem but also pose a strong deterrent to the flow of funds in the black and gray industries across the entire East Asia region. In the future, if the payment industry wishes to survive, compliance and transparency will become uncompromisable baselines.
