South Korea is tightening its grip on digital asset flows, planning to apply the Travel Rule even to transfers below $680.
South Korea is preparing an aggressive update in anti-money laundering rules following the 2021 revision of the Special Financial Information Act.
The country’s Financial Services Commission wants the crypto Travel Rule to apply even to transfers under 1 million won ($680).
The adjustment aims to close a loophole that lets users bypass identity requirements by dividing large transfers into smaller chunks.
Under the new plan, exchanges will collect and share sender and receiver data for all transfers, no matter how small.
Authorities have seen a surge in cases of tax evasion, drug deals, and overseas payment schemes that rely on crypto, as per local reports. As a result, strict policies are needed.
Harder Rules for Exchanges and High‑Risk Platforms
The government will also target offshore exchanges it sees as high‑risk. These platforms will be blocked from serving South Koreans.
Local exchanges will need to pass tougher financial checks to stay registered. Anyone with drug or tax‑related criminal records will be banned from becoming a major shareholder in a regulated crypto company.
The FIU also plans to add fast account‑freeze powers, so money can’t vanish during investigations. The full rulebook should be finished in the first half of 2026 before heading to the National Assembly.
A Market Changing Through Mergers and Crime Cases
South Korea’s crypto industry is rapidly changing with Naver Financial eyeing acquisition of Dunamu, the company behind Upbit, in a deal worth over $10 billion.
If it goes through, the country’s top payments firm and its biggest crypto exchange will operate together, with stablecoins playing a key role.
Dunamu has already announced plans for a won‑backed stablecoin and a layer‑2 network designed for payments.
On the other hand, prosecutors are also dealing with a major corruption case involving police officers. Two senior officers were charged with taking bribes from illegal exchange operators who laundered about $186 million from voice‑phishing scams.
The operators ran fake gift‑certificate shops that secretly turned criminal money into USDT. Investigators froze around $1.1 million but believe the total profits were much higher.
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