South Korea drops Travel Rule threshold for crypto transfers
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
South Korea's Cabinet has approved amendments to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information, expanding the crypto Travel Rule to cover all transfers between registered virtual asset service providers (VASPs) regardless of value. The previous 1 million won (about $700) threshold has been removed. The changes also introduce new anti-money laundering (AML) measures for transfers involving overseas exchanges and personal wallets.
Why it matters
The removal of the transfer value threshold aims to prevent users from evading the Travel Rule by splitting transactions into smaller amounts. The new AML requirements seek to address increased risks of money laundering through overseas exchanges and personal wallets, closing gaps in existing regulations. This impacts crypto platforms’ compliance obligations and may affect how users conduct transfers.
Key context
The Travel Rule requires that information about the sender and recipient accompany crypto transfers between VASPs to prevent illicit activity. Previously, this applied only to transfers exceeding 1 million won. The Financial Intelligence Unit cited a case where a user circumvented the rule by making many smaller withdrawals under this threshold. New rules also require platforms to monitor suspicious transactions exceeding 10 million won involving foreign exchanges or personal wallets.
Key numbers and entities
The threshold removal targets transfers under 1 million won (approximately $700). In one case highlighted, 216 withdrawals were made, each under 1 million won, after a deposit of about 200 million won. The new AML monitoring threshold for suspicious transactions is transfers of at least 10 million won. The amended decree’s VASP registration provisions take effect Aug. 20, with some compliance deadlines extended by a year.
What remains unclear
The source does not flag open questions or limitations but does not provide details on enforcement mechanisms or how overseas compliance will be coordinated. It does not specify how VASPs will determine counterparty risk beyond a general framework.