South Korea Removes Travel Rule Threshold, Tightens Exchange Oversight

South Korea's Financial Intelligence Unit (FIU) has formally announced that a revised enforcement decree of the Act on the Reporting and Use of Specific Financial Information was passed by the State Council, with the explicit goal of securing stronger oversight of the cryptocurrency industry. Under the new rules, regulators will conduct a more rigorous review of major shareholders of cryptocurrency exchanges, and exchanges will be required to maintain a debt-to-asset ratio of no more than 200%. In addition, the so-called travel rule, which previously applied only to transactions exceeding 1 million won, is now extended to cover every transfer, effectively removing the minimum amount threshold. For transactions conducted through overseas exchanges or involving personal wallets, the revised regulatory framework will apply differentiated measures depending on the assessed risk level. Exchanges are also obliged to employ qualified professionals, secure the necessary equipment and build internal control systems. Existing exchange operators are entitled to a one-year grace period. Several provisions are scheduled to take effect on Aug. 20, while the travel rule-related requirements will be formally implemented six months later.