REGULATIONS

Crypto Travel Rule
in

South Korea

🇰🇷
Regulator
Travel Rule required from
Travel Rule regulation still pending
September 25, 2022


In line with FATF guidance, South Korea’s amended its Act on Reporting and Using Specified Financial Transaction Information to require virtual asset service providers (VASPs) to register with the local financial regulator, the Korea Financial Intelligence Unit (KoFIU), before undertaking business operations. The amended act also mandated the Crypto Travel Rule for international virtual asset transfers over 1 million won (~USD 865). The crypto travel rule enforcement date is March 25, 2022 in South Korea. 

Is cryptocurrency legal in South Korea?

Cryptocurrencies are allowed for use but not considered legal tender in South Korea. 

Are there any AML crypto regulations in South Korea?

The FSC announced a revision to Korea’s Anti-Money Laundering-related law, the Act on Reporting and Using Specified Financial Transaction Information (FTRA), in March 2021. The revision requires VASPs to register with the Korea Financial Intelligence Unit (KoFIU) and comply with various AML obligations, such as filing reports on suspicious transactions and verifying the identity of their customers.

Is the Crypto Travel Rule mandated in South Korea?

AML requirements similar to the Crypto Travel Rule have been mandated in South Korea. The Financial Services Commission (FSC) announced a revision to the Anti-Money Laundering-related law, the Act on Reporting and Using Specified Financial Transaction Information Requirements of Virtual Asset Service Provider, which subjects VASPs to the AML requirements.  

Who regulates cryptocurrency in South Korea? 

The Korean Financial Intelligence Unit (KoFIU) is the primary authority responsible for supervising VASP compliance with AML/CFT obligations. 

FATF Travel Rule requirements in South Korea

Are there licensing or registration requirements for VASPs in South Korea?

Yes. Korea’s recently amended Anti-Money Laundering-related law, the Act on Reporting and Using Specified Financial Transaction Information, indicates that VASPs must register with the Korea Financial Intelligence Unit (KoFIU) by September 24, 2021. 

Among other requirements, To register with the KoFIU, VASPs must

  • Acquire an Information Security Management Systems (ISMS) certification from the Korea Internet and Security Agency (KISA), 
  • Use real-name bank accounts for money remittance between the VASPs and their users. 

When does the Crypto Travel Rule go into effect in South Korea?  

Domestic and foreign VASPs must register with the KoFIU and comply with AML requirements by March 25, 2022. 

Does South Korea permit a grace period to comply with the Crypto Travel Rule?

The amended Act on Reporting and Using Specified Financial Transaction Information went into effect in March 2021; however, all VASPs were given a six-month grace period to comply till September 2021.

Complying with the FATF Crypto Travel Rule in South Korea

What is the minimum threshold for the Crypto Travel Rule in South Korea?

Under the Financial Transaction Reports Act (FTRA), the threshold differs depending on the type of transaction, ranging from KRW 1 million (~USD 880) to KRW 3 million (~USD 2640.)

What personally identifiable information is required to be shared for the Crypto Travel Rule in South Korea?

Under the Financial Transaction Reports Act (FTRA), financial institutions are required to identify and verify customer identification information, including name, identification number, address, nationality, contact information, and beneficial ownership for customer due diligence. 

Are there differences in customer PII requirements for cross-border transfers versus transfers within South Korea?

Requirements are being developed that may treat crypto transactions as overseas transactions. The Foreign Exchange Transaction Act (FETA) and the Foreign Exchange Transactions Regulations (FETR) regulate the remittance of fiat funds out of Korea to overseas accounts. These regulations ask for the existence of a legal basis, along with supporting documents overseas. In addition, all outbound remittances in an amount exceeding US$3,000 per transaction or a yearly aggregate limit of US$50,000 must be reported to and approved by the Bank of Korea (BOK).

What are the non-custodial or self-hosted wallet requirements in South Korea?

Currently, there are no requirements for transfers to and from non-custodial or self-hosted wallets.

Why choose Notabene for Crypto Travel Rule Compliance in South Korea?

Korean VASPs and global VASPs targeting users in Korea should consider a risk-based approach to crypto compliance. Notabene helps VASPs and financial institutions comply with the Amendment to the Act on Reporting and Use of Certain Financial Transaction Information, closely related to the FATF’s Recommendation 16 “Crypto Travel Rule” as required by the Korea Financial Intelligence Unit (KoFIU.)


Last updated
September 1, 2021

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