South Korea urges FATF to lower crypto Travel Rule threshold

South Korea’s Financial Intelligence Unit presented a proposal at a FATF plenary in Paris last week urging the Financial Action Task Force to lower the threshold for the crypto Travel Rule and require both sending and receiving crypto asset service providers to share customer information. The FIU announced the submission on Monday.

South Korea currently enforces Travel Rule obligations on transfers above 1 million won, about $650. The FIU called for applying those requirements to smaller transactions to close traceability gaps in cross-border transfers and to better align with international anti-money-laundering standards.

The FIU also urged stronger measures against offshore and unregistered crypto platforms, citing increased use of such services in illicit finance cases and the risk of regulatory arbitrage. FIU Commissioner Lee Hyung Ju welcomed FATF’s adoption of a report on decentralized finance during the plenary and noted that regulatory arbitrage mainly stems from differences in licensing, supervision and offshore oversight.

FATF’s Travel Rule, incorporated into Recommendation 15 in 2019, requires exchanges and other crypto asset service providers to exchange sender and recipient identifying information for transfers above set thresholds. A targeted FATF update in 2025 found uneven global implementation: about 49% of jurisdictions were partially compliant with CASP requirements, 21% were non-compliant, and roughly 29% were rated largely compliant or compliant as of April 2025.

The FIU proposal was raised during broader talks on implementing Recommendation 15. FATF also approved a report examining risks tied to decentralized finance, a topic the FIU highlighted in its plenary remarks. Countries and regulators are continuing to assess how to apply anti-money-laundering rules to a growing and more complex crypto sector.