South Korea -- Travel Rule Implementation Regulatory Overview

South Korea adopted the FATF Travel Rule in 2022 under the Act on Reporting and Using Specified Financial Transaction Information, effective March 25, 2022, initially with a 1 million KRW (approximately $700) threshold for virtual asset service providers (VASPs). [4][5]

In 2025–2026, the Financial Services Commission (FSC) and Korea Financial Intelligence Unit (KoFIU) announced expansions to address loopholes like smurfing, lowering the threshold toward zero for stricter monitoring, including stablecoins and high-risk offshore transfers, with legal revisions targeted for finalization by mid-2026.[1][2]

Key Details

• Adoption and Effective Date: Adopted and in force since March 25, 2022.[4] Expansion announced February 5, 2025, with a six-month grace period for upgrades, targeting full effect around August 2025, though further revisions continue into 2026.[1][2]
• Threshold Amounts: Originally 1 million KRW; expansions lower it to cover smaller transactions, aiming for zero-threshold transparency to close smurfing gaps.[1][2]
• VASPs Covered: All registered VASPs must comply with FATF Recommendation 16, including identity sharing for sender/recipient data in VA transfers; now extends to stablecoins and blocks non-compliant offshore exchanges.[1][2][4]
• Technical Implementation Requirements: VASPs require system upgrades for data collection/sharing (e.g., originator/beneficiary info); FSC provides workshops, technical guidance, and a support desk during transitions. No specific protocol mandated, but aligns with global interoperability challenges.[1][2][4]
• Penalties for Non-Compliance: Not detailed in available sources; enforcement falls under FSC/KoFIU AML framework revisions.[1]

Primary Legislation/Guidance:

• Act on Reporting and Using Specified Financial Transaction Information (effective 2022).[4]
• FSC announcements (February 2025 expansion).[2]
• Ongoing FSC/KoFIU AML overhauls (2026).[1]

As of early 2026, implementation is phased and tightening, but search results lack full details on finalized 2026 penalties or exact zero-threshold status.[1][2]