Strengthened encryption regulation in Korea: Enhanced scrutiny by large shareholders in the exchange and removal of the Travel Rule threshold

On 11 August, according to Korean media Edaily, the Korea Financial Intelligence Analysis Agency (FIU) announced that amendments to the implementing decree of the Specific Financial Information Act aimed at strengthening the regulation of the encryption industry had been adopted by the Council of State. The main changes in the new regulations include a more rigorous review by regulators of the stockholders ' qualifications of the exchange, with a requirement that the exchange ' s debt ratio should not exceed 200 per cent. In addition, the previous Travel Rule was valid only for transactions of more than 1 million won and will in the future cover all transfers without setting a monetary threshold. Transactions involving overseas exchanges and individual wallets are subject to differentiated controls depending on the level of risk. The new regulations also require exchanges to be staffed with professionals and the necessary equipment, as well as an internal control system that allows existing exchanges to have a one-year grace period. Some of the provisions will enter into force on 20 August, and elements such as Travel Rule will be formally implemented in six months。