Catenaa, Tuesday, December 30, 2025- South Korea is moving to tighten oversight of cryptocurrency transfers under 1 million won as regulators seek to curb illicit activity increasingly routed through small-value transactions.
Financial authorities are reviewing amendments to the Act on Reporting and Using Specified Financial Transaction Information to extend the so-called travel rule to lower thresholds, according to officials familiar with the process.
The proposal would require virtual asset service providers to collect and share sender and recipient details for all crypto transfers, including those below the current reporting limit.
The travel rule already applies to larger transactions and functions as a real-name verification system for deposits and withdrawals.
The review follows the formation of a task force led by the Korea Financial Intelligence Unit, which met in late November to outline broader reforms to the country’s anti-money laundering framework.
Regulators say criminals have increasingly used “smurfing,” breaking large sums into many small transfers, to avoid identity checks.
Authorities have linked low-value crypto transfers to tax evasion, drug trafficking, and the movement of illegal funds overseas.
Officials say existing rules, first designed more than two decades ago, have struggled to keep pace with cross-border digital crime.
Beyond the travel rule expansion, the task force is weighing measures that would allow temporary suspension of accounts suspected of ties to serious crimes, preventing funds from being moved before investigations begin.
Proposed revisions would also widen anti-money laundering duties to certain professionals involved in complex financial transactions.
The Financial Supervisory Service has advised domestic exchanges to operate continuous monitoring systems and report unusual activity.
Additional proposals would restrict ownership of licensed crypto firms by individuals with prior tax or drug convictions and require preregistration of cross-border crypto businesses with the Bank of Korea from the second half of 2025.
South Korea is also aligning with international data-sharing standards through the OECD’s Crypto-Asset Reporting Framework, with transaction data collection expected to begin next year and broader exchanges planned for 2027.
