South Korea to Abolish Mandatory Reporting for Crypto Asset Transfers Exceeding 10 Million Won, Shifting Risk Management to Exchanges

On June 5, according to Korean SBS News, the Korean Financial Intelligence Unit (FIU) has amended the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information, canceling the mandatory reporting obligation for virtual asset transfers exceeding 10 million Korean won and shifting the responsibility for risk management to exchanges. The original proposal required domestic operators to report to the FIU for transfers exceeding 10 million Korean won to overseas, regardless of risk level. After considering industry feedback, the FIU decided to abolish mandatory reporting and instead require companies to establish internal risk management systems. Other adjustments include: the scope of the Travel Rule will be expanded from amounts over 1 million Korean won to all amounts; enhanced customer authentication for high-risk suspicious transactions will change from mandatory to being executed only when a company deems the risk exceptionally high; a one-year grace period will be granted to small businesses for the reporting condition of a debt-to-equity ratio not exceeding 200%; and the requirement for anti-money laundering computer equipment to be located domestically will be relaxed to allow the use of overseas cloud services. The revised decree will come into effect on August 20 after review by the Ministry of Government Legislation.