REGULATION | South Korea Pushing for FATF Travel Rule Expansion to Cover Smaller Transactions Below $700

South Korea is pushing for one of the toughest anti-money laundering regimes in crypto by expanding the so-called Travel Rule to cover even small-value digital asset transfers, a move that would eliminate a long-standing reporting threshold that regulators say criminals exploit.

The proposal was presented by South Korea’s Financial Intelligence Unit (FIU) during discussions at the Financial Action Task Force (FATF) plenary meeting in Paris, France in June 2026 where Korean officials argued that growing cross-border crypto activity has increased the risk of money laundering through offshore and unregistered virtual asset service providers (VASPs).

Under South Korea’s current framework, crypto exchanges are generally required to collect and transmit information about the sender and recipient for transfers above 1 million won (about $700). Authorities now want those requirements extended to transactions below that threshold, closing a loophole that allows users to split larger transfers into multiple smaller transactions to avoid scrutiny.

South Korean officials also urged FATF members to strengthen oversight of high-risk and unregistered overseas crypto platforms, warning that criminal organizations increasingly use foreign exchanges operating outside domestic regulatory frameworks. The FIU said member states should consider stricter customer due diligence requirements and transaction restrictions for such platforms including Travel Rule obligations application to both originating and receiving crypto asset service providers.

The initiative reflects a broader regulatory trend in South Korea where authorities have been tightening oversight of digital assets following the implementation of the Virtual Asset User Protection Act and amid concerns over:

• tax evasion,
• illicit cross-border payments, and
• money laundering

through crypto networks.

If adopted, the expanded Travel Rule would require exchanges to collect and share identifying information for virtually all crypto transfers, regardless of size, significantly increasing compliance obligations for digital asset firms while bringing South Korea’s anti-money laundering framework closer to full transaction-level monitoring.

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