- Starting August 20, 2026, all Korean VASP transfers will face Travel Rule requirements.
- Despite the change, the updated rules don’t automatically include self-custody wallets.
- Travel Rule mainly covers VASP transfers, generally excluding peer-to-peer movements.
From August 20, 2026, every transfer between South Korean VASPs (Virtual Asset Service Providers) becomes subject to Travel Rule requirements, regardless of value. Previously, the requirements only applied to crypto transfers worth ₩1 million (around $700) or more.
Under the Travel Rule, VASPs have to collect and pass along sender and receiver details for every crypto transfer. Now, exchanges like Upbit, Bithumb, Coinone, Korbit, or any Korean exchange sending funds to another regulated platform will have to swap customer information even for tiny transactions.
South Korea’s FSC (Financial Services Commission) estimated that about 60% of transfers between local exchanges were below ₩1 million, leaving a hole in AML oversight that criminals could take advantage of by splitting transactions.
How Withdrawals to Personal Wallets May Be Handled
The updated rules don’t automatically include self-custody wallets.
Instead, transfers between a Korean exchange and a personal wallet (like MetaMask or Ledger), where you control your private keys, will likely be subject to a risk-based approach rather than the full Travel Rule.
As a result, exchanges may verify that the wallet belongs to the user, do extra checks depending on the situation, ask for more information on riskier transfers, or ramp up monitoring if they spot potential money laundering red flags.
Importantly, the regulation doesn’t say exchanges have to treat every withdrawal to a personal wallet the same as a transfer to another exchange under the Travel Rule.
What Remains Outside the Travel Rule?
It’s worth noting that not every crypto movement now falls under the Travel Rule, as it still mainly covers transfers that go through VASPs.
In most cases, transfers such as sending crypto between two personal wallets or any on-chain move where no regulated VASP is involved won’t be covered by the Travel Rule’s data-sharing requirements.
In the end, for most users, things probably won’t feel all that different, since exchanges will just keep gathering and sharing the necessary details behind the scenes as they already do for bigger transfers. However, it’s possible the change could increase the cost and duration of the transactions.
Additionally, users should expect ID checks for all exchange-to-exchange transfers, regardless of value, with additional checks possible for self-hosted wallet withdrawals and overseas platforms.
Related: South Korea to Propose Stablecoin Consolidation Bill
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