South Korea Scraps Crypto Transfer Threshold, Tightens AML Rules on VASPs

South Korea's Cabinet has approved amendments to its rules on Virtual Asset Service Providers (VASPs), eliminating the $700 threshold for information sharing on crypto transfers.

The updated Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information requires VASPs to share sender and recipient data on every transfer, regardless of size. This change aims to stop users from exploiting a loophole by splitting large transactions into smaller ones.

According to the Financial Intelligence Unit, one documented case involved a user depositing 200 million won into an exchange, purchasing Tether USDt (USDT), and then withdrawing the funds in 216 separate transactions.

The revised decree also introduces Anti-Money Laundering (AML) requirements for transfers involving overseas crypto exchanges or personal wallets. VASPs will be required to assess the risk level of each foreign counterparty and restrict transfers accordingly.