Key Regulatory Changes
- •South Korea expands crypto rules to small transactions, including those below 1 million won.
- •New Anti-Money Laundering (AML) measures now affect all digital assets.
- •Regulation is expected to increase compliance costs for crypto exchanges.
Expanded AML Compliance
South Korea's Financial Services Commission, under the leadership of Chairman Lee Eok-won, announced on November 28, 2025, a significant expansion of its crypto Travel Rule. This extension now includes transactions below the threshold of 1 million won.
The broadened scope of AML compliance now encompasses all cryptocurrencies. This development may lead to elevated compliance costs for crypto exchanges and could potentially reduce liquidity and trading volumes for smaller transactions.
The nation has broadened its crypto Travel Rule, applying it to transactions under 1 million won as part of a continuing effort to enhance anti-money laundering measures within its crypto sector. The Financial Services Commission announced these changes in late 2025, mandating identity verification for all crypto transfers, covering both major and micro transactions.
Industry Impact and Global Alignment
"We are expanding the crypto Travel Rule to ensure all virtual asset transactions under 1 million won are subject to AML compliance measures."
The crypto industry is facing increased compliance costs as exchanges are required to upgrade their systems. This regulation aims to curb illicit financial flows through more comprehensive oversight.
While larger transactions were previously the primary focus, the extension now affects all digital assets, including Bitcoin and stablecoins. This is expected to impact small-scale trading activity due to the additional monitoring requirements.
In alignment with international standards, these measures conform to the Financial Action Task Force's guidelines. Although immediate on-chain data effects are not yet available, a decline in cross-border trading is anticipated.
Historically, similar regulations implemented in South Korea have reduced illicit activities but also increased scrutiny on exchanges. This latest change could alter market dynamics, potentially affecting liquidity and trading volumes across various crypto assets.