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Regulator in South Korea Eases Crypto Reporting Rules Amid Industry Concerns

In a significant development for the cryptocurrency landscape in South Korea, the Financial Intelligence Unit (FIU) has eased its proposed reporting requirements for large crypto transfers.

Previously, the FIU aimed to enforce strict reporting rules under the Specific Financial Information Act, targeting suspicious overseas transactions exceeding 10 million Korean won, roughly $6,400.

Revising its stance, the FIU now allows domestic operators to utilize their own anti-money laundering (AML) risk management systems rather than applying a blanket reporting threshold.

This decision follows consultations with crypto exchange representatives, reflecting industry concerns regarding operational feasibility.

The Digital Asset Exchange Joint Council (DAXA) had previously expressed opposition to the initial proposals, warning of potential compliance overload.

With the new adjustments, companies will only need to conduct enhanced customer due diligence for transactions deemed particularly high-risk.

However, stricter requirements associated with the travel rule will remain unchanged, affecting transactions below 1 million won.

These changes are positioned to take effect by August 20, pending review by relevant government agencies.

As South Korea moves toward implementing a new crypto tax law by January 2027, these adjustments signal a critical moment for the country's crypto regulatory framework.

The evolving dialogue between regulators and the crypto industry will be crucial in shaping future policies and ensuring a balanced approach to innovation and compliance.