--- title: "South Korea Eliminates Crypto Transfer Reporting Threshold to Combat Money Laundering" url: https://projectchintan.com/article/south-korea-removes-crypto-transfer-reporting-floor-clu6q publisher: Project Chintan author: Project Chintan Newsroom section: Global published: 2026-08-11T18:08:12.174Z modified: 2026-08-11T21:30:04.668Z language: en-IN --- # South Korea Eliminates Crypto Transfer Reporting Threshold to Combat Money Laundering South Korea's Cabinet has approved the removal of the 1 million won reporting threshold for cryptocurrency transfers. This change, effective February 20, 2027, requires all transfers between regulated virtual asset businesses to include sender and recipient information. ## Key takeaways - South Korea has eliminated the 1 million won reporting threshold for cryptocurrency transfers. - The updated Travel Rule requires sender and recipient information for all transfers between regulated virtual asset service providers. - This change aims to prevent money laundering through the division of large sums into smaller transactions. - The new regulations will take effect on February 20, 2027, following a preparation period for VASP compliance systems. - Stricter registration standards for virtual asset companies are also being introduced as part of the anti-money laundering overhaul. ## What Happened South Korea has eliminated the reporting threshold for cryptocurrency transfers, a measure designed to enhance safeguards against money laundering. The nation's Cabinet approved amendments to the Act on Reporting and Using Specified Financial Transaction Information on Tuesday, August 11. The existing rule, which required reporting for transfers exceeding 1 million won, has been removed. This updated Travel Rule will come into effect on February 20, 2027, providing virtual asset service providers (VASPs) with six months to adjust their compliance systems. The decision targets a loophole that allowed criminals to circumvent regulations by dividing large sums into numerous smaller transactions, a practice known as smurfing or structuring. Regulators cited an example of a customer who deposited approximately 200 million won, purchased Tether stablecoins, and then made 216 withdrawals, each under the former 1 million won limit. Previously, transfers below this threshold constituted about 60% of domestic virtual asset transactions. ## Why It Matters The new regulation mandates that all transfers between registered domestic VASPs must be accompanied by sender and recipient information, regardless of the amount. Receiving VASPs will be obligated to obtain originator and beneficiary details, and if this information is not provided, they must request it from the sending business and may refuse the transfer if it cannot be secured. The Travel Rule aims to create a traceable record for digital asset movements between regulated entities, applying anti-money laundering principles to cryptocurrency transactions. This move shifts South Korea from a threshold-based model to comprehensive coverage for domestic transfers between regulated providers. Furthermore, rules governing transfers involving overseas exchanges and personally controlled wallets are being tightened. Domestic VASPs will assess money laundering risks for these transactions and can prohibit those with counterparties deemed high-risk. Transfers of 10 million won or more to such destinations will face heightened scrutiny. ## Background South Korea initially implemented its cryptocurrency Travel Rule in March 2022, setting a minimum reporting requirement of 1 million won for transfers. The current revision is part of a broader effort to strengthen the country's anti-money laundering regime. This overhaul includes enhanced registration standards for virtual asset companies, involving closer examination of major shareholders, management, and financial stability. VASPs will be expected to maintain robust organizational structures, personnel, IT systems, and internal controls. New financial requirements within the revised framework include a general debt ratio limit of 200%. These measures are intended to prevent market entry by operators with significant financial or compliance issues. Some of these stricter registration provisions are set to take effect from August 20, while exchanges have a longer preparation period for the zero-threshold Travel Rule. ## Key Facts - South Korea's Cabinet approved the removal of the 1 million won reporting threshold for cryptocurrency transfers on Tuesday, August 11. - The expanded Travel Rule for regulated virtual asset businesses takes effect on February 20, 2027. - Under the new rule, all transfers between registered domestic VASPs will require sender and recipient information, regardless of monetary value. - Transfers below 1 million won previously represented approximately 60% of domestic virtual asset transfers. - The country introduced its initial cryptocurrency Travel Rule in March 2022, applying it to transfers of at least 1 million won. - Tighter registration standards for virtual asset companies, including financial requirements like a debt ratio capped at 200%, are also being implemented. --- Canonical: https://projectchintan.com/article/south-korea-removes-crypto-transfer-reporting-floor-clu6q Reported from: Multiple Sources