South Korea drops Travel Rule threshold for crypto transfers

South Korea will expand its crypto Travel Rule to all transfers between registered virtual asset service providers (VASPs), removing the current 1 million won (about $700) threshold.

The country’s Cabinet approved amendments to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information on Tuesday.

Under the changes, the Travel Rule will apply to all transfers between registered crypto service providers regardless of value. Receiving platforms will also be required to obtain sender and recipient information and may request missing information or reject transactions when required data is unavailable.

Removing the threshold is intended to prevent users from circumventing the rule by splitting transfers into smaller amounts, according to the Financial Intelligence Unit. 

It cited one case in which a user bought Tether USDt (USDT) after depositing about 200 million won into a crypto exchange and then made 216 withdrawals, each worth less than 1 million won.

Related: South Korea plans stablecoin rules as opposition pushes crypto tax repeal

South Korea tightens rules for overseas exchanges, personal wallets

The amendments also introduce new Anti-Money Laundering (AML) requirements for transfers involving overseas crypto exchanges and personal wallets.