South Korea Removes Threshold on Crypto Travel Rule, Expands AML Rules

South Korea’s Cabinet has approved amendments eliminating the previous 1 million won threshold for its crypto Travel Rule, meaning information-sharing requirements will now apply to all transfers between registered virtual asset service providers, regardless of transaction size. Receiving platforms must collect sender and recipient details and can reject transactions if required information is missing.

Crackdown Targets Transaction Splitting

Regulators said removing the threshold aims to close a loophole allowing users to avoid reporting requirements by breaking large transfers into smaller amounts. Authorities cited one case where a user deposited roughly 200 million won into an exchange and then made over 200 separate withdrawals, each kept just under the previous reporting limit.

New Rules for Overseas Exchanges and Personal Wallets

The amendments also introduce stricter anti-money laundering requirements for transfers involving foreign exchanges and personal wallets. Local platforms will need to assess counterparty risk, permitting transfers to low-risk overseas exchanges while generally allowing transfers to personal wallets only when sender and recipient match. Transfers to high-risk counterparties will be banned outright, and platforms must implement monitoring systems for larger transfers involving overseas exchanges or personal wallets.

Stronger Registration Standards for Providers

The changes also raise registration requirements for crypto service providers, covering financial health, internal controls, staffing, and infrastructure, while increasing scrutiny of major shareholders. New registration provisions take effect August 20, though existing providers will have an additional year to meet some updated standards.