South Korean crypto exchanges have reached the government-mandated deadline to come into compliance with the so-called Travel Rule, but not all industry players are pleased with the measure.
Starting Friday, Korean exchanges will flag any crypto transfers worth more than roughly $821. Transfers higher than that value will be restricted to user-verified wallets, with a select number of exchanges adopting their Anti-Money Laundering (AML) system.
The Travel Rule is a set of guidelines issued by the international financial watchdog Financial Action Task Force (FATF) designed to help authorities track the movement of virtual assets between virtual asset service providers (VASP) such as crypto exchanges or digital asset issuers.
A source from a local centralized exchange today praised the regulatory measure as a step forward for the country’s crypto industry, telling Cointelegraph that:
“The industry is now taking a step toward institutional acceptance and will work harder for mass adoption.”
There may be a problem for South Korea’s traders who racked up $45.9 billion in crypto market value in 2021, figuring out which exchanges they can transfer funds to and from. Among the big four exchanges Upbit, Bithumb, Coinone, and Korbit, there are two Travel Rule systems. Each system functions slightly differently and requires international exchanges to follow its guidelines. If those guidelines are not followed, transfers will not be allowed.
According to the CEO of South Korea-based crypto venture capital Hashed Simon Kim, these differences are likely to cause confusion and…