South Korea Tightens Crypto Rules with Lowered Threshold and Stricter Vetting
South Korea has amended its regulations regarding cryptocurrency transactions and exchange operators. The change eliminates the requirement for exchanges to report transfers above 1 million won ($700) under the Travel Rule, which now applies to all transfer values.
The Financial Intelligence Unit of the Financial Services Commission (FSC) approved this revision, citing concerns about crypto being split into smaller amounts and then pooled back into a single address. The FIU also introduced stricter rules for exchange operators, requiring them to undergo financial-health tests and have a debt-to-equity ratio at or below 200%.
The new regulations will take effect in August 2024, with existing operators receiving a one-year reprieve on the debt-ratio test. The FSC has been tightening its rules since Bithumb made a mistaken payout of about $40 billion in Bitcoin, prompting stricter registration rules for major exchanges.