South Korea is about to widen crypto transfer reporting below the 1 million won threshold
A March FSC proposal says the travel rule would cover smaller domestic VASP transfers from Aug. 20, while larger transfers to overseas venues or wallets face separate reporting conditions.
South Korea is preparing to move more domestic crypto transfers into the information-sharing perimeter used by its travel rule. In a March 30 proposal, the Financial Services Commission said the existing rule for transfers of 1 million won or more between domestic virtual-asset service providers would be expanded to transactions below that amount. The timetable in the proposal points to Aug. 20, after legislative review.
The proposal says about 60% of transfers between domestic VASPs were below 1 million won in the second half of 2025. That statistic is the regulator's argument for closing a threshold-based gap, not evidence that every smaller transfer is illicit. It does show why a change in the cutoff could affect a large share of ordinary exchange-to-exchange activity.
The recipient gets a new responsibility
Under the proposed revision, the recipient VASP would also have a duty to secure the information supplied by the sender. The point is to keep originator and beneficiary data attached to transfers as they move between domestic platforms, rather than treating the receiving exchange as a passive endpoint. The rule concerns VASP-to-VASP transfers; it is not a blanket instruction for an issuer or exchange to identify every self-hosted-wallet payment.
The FSC also describes conditions for transfers from a domestic VASP to an overseas VASP or digital-wallet service. Low-risk overseas venues and same-entity transfers may be allowed under the proposal, while high-risk transactions would be prohibited. Transfers of 10 million won or more to an overseas venue or wallet would have to be reported to the Korea Financial Intelligence Unit regardless of the risk level.
A larger compliance perimeter
The travel-rule change sits inside a broader package. The FSC proposal would expand scrutiny of major VASP shareholders, set financial-soundness conditions and require organizational, personnel, computer-system and internal-control capabilities for registration. It would also require customer due diligence to verify information accuracy and apply more rigorous checks to high-risk individuals or products.
The practical test is whether the final rules preserve useful information without turning a threshold change into friction that pushes activity outside supervised venues. The March document was a proposal and its comment period closed before the stated Aug. 20 target. Exchanges, wallets and users therefore need the final legal text and implementation guidance before treating the timetable as a completed rule. The direction is clear: South Korea is tightening the handoff between platforms, but the operational details remain the part to watch.
