South Korea drops Travel Rule threshold for crypto transfers

South Korea is removing the 1 million won threshold on its crypto Travel Rule, requiring information-sharing on all transfers between registered virtual asset service providers (VASPs). The Cabinet approved amendments to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information on Tuesday.

The Travel Rule, aligned with FATF standards, obliges crypto platforms to share sender and recipient details. Under the new rules, receiving platforms must obtain that information and can reject transactions when required data is missing. The Financial Intelligence Unit said the threshold removal targets users who split transfers into smaller amounts to evade the rule. It cited a case where a user bought Tether USDt after depositing about 200 million won into an exchange and then made 216 withdrawals, each under 1 million won.

The amendments also introduce Anti-Money Laundering requirements for transfers involving overseas exchanges and personal wallets. Registered local VASPs must assess counterparty risk. Transfers to low-risk overseas exchanges are permitted; transfers to other foreign exchanges and personal wallets are generally allowed when sender and recipient are the same person. High-risk counterparties are prohibited.