South Korea Broadens Travel Rule Framework to Cover Micro Transactions

South Korea’s financial regulators are taking a more comprehensive approach to virtual asset oversight. Following the first task force meeting held on December 29, the Financial Intelligence Unit (FIU) has signaled its intention to extend Travel Rule compliance requirements beyond the current 1 million KRW threshold, capturing smaller transaction sizes within its regulatory net.

This policy expansion marks a significant shift in the region’s korea plug type—essentially establishing a new regulatory architecture that aims to close monitoring gaps in the virtual asset ecosystem. The move reflects growing concerns about anti-money laundering (AML) enforcement across the industry, particularly as digital currencies and stablecoins continue to proliferate.

Strengthening the VASP Regulatory Framework

The core objective of this initiative is to refine existing Virtual Asset Service Provider (VASP) regulations and embed more robust AML mechanisms into the operational requirements for the sector. By lowering the transaction threshold, authorities intend to capture more cross-border asset flows and establish clearer compliance standards for exchanges, wallet providers, and stablecoin issuers.

The Special Financial Act revision process, now underway through this dedicated task force, seeks to create a more granular regulatory environment. This approach ensures that even modest transactions don’t slip through compliance oversight—a critical consideration as bad actors often use structured smaller transfers to evade detection.

Industry Implications

This korea plug type update will require virtual asset platforms operating in South Korea to enhance their transaction monitoring systems and customer identification procedures. Stablecoins, which have attracted particular regulatory scrutiny, will fall within the expanded framework’s scope, subjecting them to the same Travel Rule obligations as traditional cryptocurrencies.

The expansion underscores South Korea’s determination to maintain robust AML standards while the virtual asset market continues to mature. For market participants, adapting to lower Travel Rule thresholds will become a necessary compliance cost.