South Korea Drops Plan for Mandatory Crypto Transfer Reports - Crypto Economy

TL;DR:

• South Korean exchange platforms will avoid the automatic submission of reports for cross-border operations exceeding 10 million won.
• The Digital Asset Exchange Alliance (DAXA) estimated that the original measure would have multiplied the annual volume of suspicious transaction reports by 85.
• Small businesses in the sector will have a one-year extension to comply with the debt-to-equity ratio limit of less than 200%.

South Korean financial authorities canceled the mandatory reporting plan for cryptocurrency transfers exceeding 10 million won (approximately $7,300 USD) to foreign platforms or private wallets. The country’s Financial Intelligence Unit (FIU) opted to modify the initial proposal after evaluating the direct administrative impact on the private sector.

Regulatory modifications and internal risk assessment


The FIU’s decision modifies the amendment to the Enforcement Decree of the Specific Financial Information Act. The initial approach dictated that any movement above the set threshold had to be mechanically treated as a suspicious transaction.

Information from the Digital Asset Exchange Alliance (DAXA), which integrates the five main exchanges in the Asian country, reveals that the annual volume of reports would have increased drastically. The organization’s projections indicated that mandatory notifications would jump from 63,408 to more than 5.44 million records. Companies warned that this massive flow of information would saturate compliance departments and hinder the detection of actual illicit activities.

According to an official FIU spokesperson, the modified regulatory framework delegates control responsibility to each operator’s internal systems. Authorized platforms will perform qualitative assessments based on individual risk instead of applying blocks based exclusively on the economic volume of the transfer.

Travel rule adjustments and operational extensions

Despite the elimination of this specific limit, the government will maintain the expansion of the so-called “Travel Rule.” Official reports from the regulator confirm that the current minimum threshold of 1 million won will be removed.

This legislative variation will force exchanges to strictly collect the identity data of senders and receivers in all operations, regardless of the amount of the digital capital movement. In parallel, the legal text softens the technical requirements related to local IT infrastructure. Crypto operators will be allowed to store data in cloud computing services located abroad, provided they do not manage personal credit information or confidential unique identifiers.

The final regulation will move to a review phase by the Office of Legal Affairs and the Ministry of Government Legislation. The implementation of the entire package of modified reforms is expected to officially come into force on August 20, 2026.