South Korea Scraps KRW 1 Million Threshold for Crypto Transfers Under Travel Rule

South Korea has made significant changes to its regulations regarding cryptocurrency transfers. The country's cabinet has approved a revised bill that eliminates the KRW 1 million threshold for reporting transactions under the Travel Rule, which aims to curb money laundering attempts.

The new regulations require platforms to establish suspicious transaction monitoring systems and tighten registration standards. This will include stricter anti-money laundering oversight, with phased implementation taking effect in August and six months thereafter.

The main motivation behind this change is to close structural gaps in the existing anti-money laundering framework through comprehensive transaction tracking mechanisms. Previously, transfers below KRW 1 million were exempt from reporting, significantly increasing money laundering risks.

A representative case disclosed by South Korea's financial intelligence unit revealed that a user deposited approximately KRW 200 million to purchase Tether USDt (USDT) on an exchange, then split the funds into 216 withdrawals, each below the reporting threshold, to evade detection.