Key facts
- South Korea's FIU has eased proposed reporting rules for certain overseas crypto transactions.
- The original proposal required reporting of crypto transfers over 10 million Korean won ($6,400) involving overseas platforms or private wallets.
- The FIU will now require companies to operate their own AML risk management systems for qualitative risk assessments.
- Stricter customer due diligence rules for high-risk transactions are also being eased.
- A one-year grace period for the debt-to-equity ratio requirement for virtual asset business registration is allowed.
- The expansion of the travel rule to cover transactions below 1 million won remains unchanged.
South Korean financial authorities have revised their proposed changes to the Specific Financial Information Act (SFIA), softening the reporting requirements for large cryptocurrency transactions. Initially, the Financial Intelligence Unit (FIU) proposed that domestic operators report crypto transfers exceeding 10 million Korean won (approximately $6,400) as suspicious when involving overseas platforms or private wallets, irrespective of risk assessment.
Following feedback from the crypto industry, including a statement from the Digital Asset Exchange Joint Council (DAXA) which warned of practical confusion and an unmanageable surge in suspicious transaction reports, the FIU has decided to require each company to implement its own Anti-Money Laundering (AML) risk management system. This allows for qualitative assessments of risky transactions rather than a uniform threshold.
The amendments also ease stricter customer due diligence rules, requiring them only for particularly high-risk transactions. A one-year grace period will be provided for the debt-to-equity ratio requirement for virtual asset business registration, benefiting smaller businesses. However, the expansion of the travel rule to include transactions below 1 million won will remain in effect. The revised bill is slated to take effect on August 20, pending review. These adjustments precede the implementation of South Korea's crypto tax law in January 2027.