South Korea Crypto Travel Rule Expansion FATF Compliance Push

South Korea’s Financial Intelligence Unit is pushing to expand the FATF Travel Rule for crypto transfers after raising concerns at talks in Paris focusing on tighter AML compliance and offshore risk gaps.

Crypto Transfer Threshold and Compliance Changes

The rule currently applies to transfers above 1 million won or about 650 dollars but regulators want it extended to smaller transactions to improve traceability and reduce illicit crypto flows between platforms.

Cross Border Oversight and Service Provider Responsibility

Officials said both sending and receiving crypto service providers should share responsibility for compliance to close loopholes in cross border transfers and prevent offshore misuse of digital assets.

FATF also reviewed decentralized finance risks and reported uneven enforcement of Recommendation 15 adopted in 2019. Only 29 percent of jurisdictions are compliant while 49 percent remain partially compliant.

Commissioner Lee Hyung Ju said differences in licensing supervision and offshore oversight are driving regulatory arbitrage and urged stronger action against unregistered crypto platforms operating across borders. He emphasized global coordination is needed to ensure consistent enforcement and reduce gaps between jurisdictions worldwide and strengthen anti money laundering standards.