South Korea Pushes Crypto Travel Rule Expansion

South Korea's Financial Intelligence Unit proposed expanding the Financial Action Task Force’s Travel Rule to cover smaller crypto transfers during a FATF plenary meeting in Paris last week. The Travel Rule requires crypto exchanges to share sender and recipient information for transfers above certain thresholds to improve traceability between platforms.

Seoul already applies the rule to transfers above 1 million won ($650); the proposal would extend obligations to smaller transactions. The FIU said Travel Rule duties should fall on both originating and receiving crypto asset service providers to close gaps in cross-border transfers.

The FIU also urged stronger action against offshore and unregistered crypto platforms, citing increased misuse in illicit finance cases and risks of regulatory arbitrage. FATF approved a report examining risks tied to decentralized finance, which FIU Commissioner Lee Hyung Ju welcomed while noting arbitrage stems from differences in licensing, supervision and offshore oversight.

South Korea, Paris

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