South Korea Scraps Crypto Travel Rule Threshold

The Travel Rule requires virtual asset service providers to exchange originator and beneficiary information when processing transfers. Part of Recommendation 16 from the Financial Action Task Force (FATF), it has applied in South Korea since March 25, 2022, to crypto transfers of at least 1 million won between domestic providers. Smaller split transactions and offshore platforms have remained regulatory blind spots.

At the FATF plenary in Paris from June 15 to 19, 2026, the Korea Financial Intelligence Unit (KoFIU) proposed extending the Travel Rule to transfers below 1 million won to address the risks of cross-border money laundering and unregistered offshore providers. The Financial Services Commission disclosed the position on June 22. South Korean data show that about 60% of transfers between domestic providers in the second half of 2025 were below 1 million won.

South Korea’s Financial Services Commission (FSC) and Korea Financial Intelligence Unit (FIU) are revising the enforcement decree and supervisory rules under the Act on Reporting and Using Specified Financial Transaction Information. The proposal would require all virtual-asset transfers worth 10 million won between domestic and overseas operators to be reported as suspicious transactions. The measure is intended to strengthen cross-border anti-money-laundering oversight, but could turn risk-based reviews into blanket reporting.

The FSC and FIU announced the proposed amendments on March 30, 2026, with public consultation running through May 11 and the review expected to conclude in July. The Digital Asset Exchange Alliance (DAXA), representing 27 companies, objected to the plan. It estimated that annual filings by South Korea’s five largest exchanges would surge from about 63,000 in 2025 to more than 5.4 million, an increase of roughly 85-fold, and said customer-data verification requirements would substantially increase the compliance burden.