South Korea called for a consistent global regulatory framework and the expansion of the Travel Rule to counter cross-border money laundering involving virtual assets and decentralized finance (DeFi).
Lee Hyung-joo, Chief of the South Korean Financial Intelligence Unit (FIU), made the remarks during the 6th Plenary Meeting of the 34th Financial Action Task Force (FATF) held in Paris, France, from June 15 to 19, 2026. According to a statement from the Financial Services Commission on June 22, the FIU plans to expand its local application of the Travel Rule to cover virtual asset transactions valued under 1 million won ($720). (Read More: What is the FATF Travel Rule on Cryptocurrency?)
Insufficient Global Progress Identified
During the meeting, FATF and Financial Action Task Force-Style Regional Bodies member countries reviewed the global implementation status of anti-money laundering standards for virtual assets. The body concluded that overall progress by individual countries remained insufficient, citing heightened risks from DeFi, artificial intelligence-based financial threats, and new virtual asset crimes. (Read More: PH Crypto Oversight Improves, But FATF Flags Gaps on DeFi, Stablecoins, Offshore Exchanges)
Lee noted that variations in licensing, registration, and supervision of offshore virtual asset service providers create regulatory arbitrage. According to Lee, these regulatory gaps weaken the effectiveness of global anti-money laundering and counter-terrorism financing measures.
Proposed Travel Rule Restrictions
To mitigate growing cross-border transaction risks, South Korea and several member countries recommended applying the Travel Rule, which requires identity verification of both senders and recipients, to both sending and receiving virtual asset entities. The proposed changes would eliminate minimum transaction thresholds globally, aligning with South Korea’s planned domestic policy expansion. (Read More: PH Still ‘Partially Compliant’ on Crypto Rules: BSP Assures Stronger Regulation)
Lee also stated that criminal organizations are increasingly exploiting offshore and unregistered service providers. He suggested that jurisdictions strengthen customer due diligence requirements and consider outright transaction restrictions on high-risk, unregistered virtual asset platforms.
Strategic Initiatives and Watchlist Updates
The FATF adopted several strategic initiatives at the plenary, including reports on public-private partnerships and data protection frameworks. The global watchdog also adopted a Decentralized Finance Risk Report and a Report on the Status of Virtual Asset Regulation Implementation. (Read More: Philippines Exits FATF Grey List: SEC Unveils Plans to Strengthen AML Compliance)
Additionally, the FATF maintained the high-risk status of North Korea, Iran, and Myanmar for failing to comply with international anti-money laundering standards. The body issued a revised statement calling for immediate action against illicit financial risks tied to cyber scam organizations operating out of Myanmar.
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This article is published on BitPinas: South Korea Seeks to Expand FATF Crypto Travel Rule to Small Transactions
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