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South Korea Crypto Industry Urges Rethink on Plan to Apply Travel Rule to Transfers Below $720

Minseung Kang

Summary

South Korea’s financial authorities are pursuing revisions to the enforcement decree of the Act on Reporting and Use of Specific Financial Transaction Information that would expand the travel rule to transactions below 1 million won.
Twenty-seven domestic virtual asset service providers (VASPs) said through DAXA that requiring information checks for all virtual-asset transfers could delay transaction processing and lead to losses from price volatility.
The industry said weak information sharing with overseas exchanges could lead to repeated delays and returns, and asked authorities to reconsider the policy by upgrading the existing monitoring system instead of expanding the travel rule.

South Korea’s crypto industry has asked regulators to reconsider a plan to expand travel rule requirements to transactions below 1 million won ($720), the Herald Economy reported on May 5.

According to the report, 27 domestic virtual asset service providers, or VASPs, submitted comments to financial authorities on April 29 through the Digital Asset eXchange Alliance, or DAXA, on proposed revisions to the enforcement decree of the Act on Reporting and Use of Specific Financial Transaction Information.

The proposal would eliminate the current 1 million won threshold for the travel rule and require verification of sender and recipient information for all virtual-asset transfers. It also includes a measure requiring receiving providers to collect that information.

The industry said the change could delay deposit and withdrawal processing. Additional verification steps would slow transactions and could leave users exposed to losses from price swings.

It also raised concerns that transfers failing to meet travel rule requirements would, in practice, be returned rather than rejected outright.

The industry said delays and returns could become a recurring problem if information sharing with overseas exchanges is not smooth.

In its submission, the industry asked authorities to revisit the policy and upgrade the existing monitoring system instead of broadening travel rule requirements.