South Korea has announced plans to expand its cryptocurrency travel rule to cover all transactions regardless of size, removing the previous threshold of 1 million won (about $680). The move aims to prevent “smurfing,” a practice where large transactions are split into smaller amounts to bypass identity verification.
Under the new rules, all virtual asset service providers must collect and share sender and recipient information for every crypto transfer. The decision follows a sharp rise in suspicious activity, with over 36,000 suspicious transaction reports filed between January and August 2025—exceeding the combined totals of 2023 and 2024.
Authorities reported cryptocurrency-related crimes totaling 9.56 trillion won ($7.1 billion) since 2021, with nearly 90% linked to illegal cross-border remittance schemes. The regulatory expansion aligns South Korea with Financial Action Task Force (FATF) anti-money laundering standards.
Legislation is expected in the first half of 2026, and major exchanges such as Upbit and Bithumb will face higher compliance costs as they enhance monitoring and reporting systems.
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