South Korea's Financial Intelligence Unit wants the global anti-money laundering standard for crypto to cover smaller transfers. The FIU is making the case within the Financial Action Task Force, arguing that current thresholds leave a gap that offshore platforms and uneven enforcement can exploit.
The push at FATF
The FIU has been advocating for an expansion of the Travel Rule — which requires exchanges to share customer info on transactions — to include transfers below the current threshold. The precise limit the FIU is targeting wasn't disclosed, but the message is clear: the gaps are big enough to matter. The discussion is happening now inside FATF working groups, not as a done deal.
Offshore risks
One of the FIU's main arguments is that smaller transfers are a channel for moving funds through exchanges based in jurisdictions with weaker oversight. If the Travel Rule only catches larger transactions, the thinking goes, bad actors can simply break up their flows. The FIU sees this as a vulnerability that grows as more retail users move onto unregulated or lightly regulated platforms.
Uneven global enforcement
The other concern: not all countries enforce the Travel Rule the same way. Some have adopted it fully, others partially, and some not at all. The FIU told FATF that this patchwork creates arbitrage — money moves to the path of least resistance. Expanding the rule's scope, they argue, would narrow those lanes even if enforcement isn't uniform overnight.
It's a straightforward pitch: close the small-transfer loophole, or watch it get wider. FATF hasn't made a decision yet. The talks are ongoing, and any change would take months — possibly longer — to work through the intergovernmental process. South Korea's FIU isn't the only member state pushing, but it's one of the loudest right now.
