South Korea Expands Crypto Travel Rule to Cover Every Transfer Between Registered Exchanges

Highlights:

• The crypto travel rule will now cover every transfer between registered crypto exchanges in South Korea.
• Crypto firms must verify transfer details and can reject transactions with missing information.
• South Korea will introduce stricter AML checks for overseas exchanges and personal crypto wallets.

South Korea has expanded the crypto travel rule to cover every transfer between registered virtual asset service providers, regardless of transaction value. The Cabinet approved the revised enforcement decree under the Act on Reporting and Using Specified Financial Transaction Information. The new regulations expand reporting requirements, strengthen anti-money laundering controls, and tighten oversight of cryptocurrency businesses.

South Korea eliminates the 1M won Travel Rule threshold, applying information-sharing for all transfers between registered crypto service providers. This could boost compliance-driven flow and reduce anonymity risks in regional markets. $BTC $ETH pic.twitter.com/2PCZ63xWcB

— Bpay News (@bpaynews) August 11, 2026

The updated framework removes the previous 1 million won threshold for transfers between registered virtual asset service providers. Every transfer between registered exchanges must now follow the same reporting requirements. Receiving exchanges must collect and verify the sender’s and recipient’s information before completing each transfer. They may request missing information from the sending exchange whenever transfer records remain incomplete.

The Financial Intelligence Unit removed the threshold after identifying repeated attempts to avoid the existing reporting rules. Officials said some users deliberately divided large cryptocurrency transfers into many smaller transactions that fell below the previous reporting limit.

The agency cited one case involving a customer who deposited about 200 million won into a cryptocurrency exchange. The customer later purchased Tether USDT before completing 216 withdrawals worth less than 1 million won each. The Financial Intelligence Unit said the transactions demonstrated how users avoided the previous reporting threshold through repeated smaller transfers.

Crypto Travel Rule Brings Tougher AML Checks

The Cabinet-approved measures also introduce stricter controls for transfers involving overseas cryptocurrency exchanges and personal wallets. Registered virtual asset service providers must assess the risk level of every overseas counterparty before approving a transfer.

Registered providers must also establish suspicious transaction monitoring systems for transfers worth at least 10 million won involving overseas exchanges or personal wallets. The monitoring systems must identify unusual transaction patterns and support anti-money laundering compliance.

The Financial Intelligence Unit said criminals increasingly exploited overseas exchanges and personal wallets because existing regulations left gaps in cross-border monitoring. Officials also identified cases where criminals purchased virtual assets with illegal proceeds before transferring those assets to high-risk overseas exchanges. The agency said those cases shaped the new restrictions on high-risk counterparties.

The updated regulations also strengthen registration standards for virtual asset service providers. Regulators will review shareholders who appoint a company’s chief executive or most board members, even without majority ownership. If a company’s largest shareholder is another corporation, regulators will also review that corporation’s largest shareholder and legal representative.

The revised framework also defines clearer grounds for rejecting registration applications. Applicants must maintain a debt ratio of 200% or less to satisfy the new financial requirements. They also must not have defaulted or committed similar credit violations during the previous three years.

New Rules Roll Out Alongside Tax Debate

South Korea will begin enforcing the revised registration requirements for virtual asset service providers on August 20. Existing providers will have one year after that date to satisfy selected financial, staffing, infrastructure and internal control requirements.

The expanded crypto travel rule, overseas transfer controls and related anti-money laundering requirements will take effect six months after the government promulgates the revised decree. Before implementation, the Financial Intelligence Unit will publish an updated registration manual to help crypto businesses comply with the new requirements. The Financial Intelligence Unit and the Financial Supervisory Service will also hold an industry briefing on August 13 to explain the revised registration system and compliance obligations.

The latest regulatory package came only hours after People Power Party lawmaker Jeong Seong-guk proposed delaying South Korea’s cryptocurrency income tax by another three years. His bill would move the implementation date for the tax from January 1, 2027, to January 1, 2030. However, the proposal would keep the cryptocurrency income tax in South Korea’s Income Tax Act while delaying its enforcement until January 1, 2030.

South Korea might delay its crypto tax until 2030.

A ruling party lawmaker just proposed pushing the 22% tax (on gains over ~$1,810) back three years from 2027.

Korean crypto investors just caught a potential break. pic.twitter.com/dQJJS4EsdY

— Jessica Gonzales (@lil_disruptor) August 10, 2026