South Korea updates crypto rules: seizures and Travel Rule

South Korea will require crypto exchanges to disclose customer holdings within seven days and apply the Travel Rule to all transfers, while introducing stricter regulations for exchanges.

South Korea is set to overhaul its cryptocurrency regulations with several key changes. The country is approaching an August 11 deadline for public comments on new crypto seizure rules. These would require exchanges to disclose customer holdings within seven days of a court order. If finalized, the rules will take effect on October 1, standardizing the process for freezing and liquidating virtual assets in civil debt cases. Additionally, South Korea will remove the 1 million won threshold for the Travel Rule, making information-sharing requirements mandatory for all transfers between registered crypto service providers, regardless of value. This aims to prevent users from bypassing the rule by splitting transfers into smaller amounts. The Cabinet has approved further amendments, including stricter scrutiny of exchange shareholders, a 200% cap on exchange debt ratios, and requirements for professional staff and internal controls. Some provisions take effect August 20, while Travel Rule changes will be implemented six months later. Existing exchanges have a one-year grace period to comply.