Travel Rule
FATF Travel Rule
A rule that requires the sender's and receiver's details to travel with a crypto transfer between exchanges.
Simple explanation
Background: Korea keeps tight control of money moving in and out of the country, and this rule is one of the reasons crypto cannot flow freely between Korean and overseas exchanges.
The Travel Rule comes from the Financial Action Task Force (FATF), the global anti-money-laundering standard setter. Just as a bank wire carries the names of the sender and the receiver, a crypto transfer between service providers must carry that information too.
In Korea it has applied since March 2022 to transfers of ₩1,000,000 or more between virtual asset service providers (exchanges). The sending and receiving exchanges must be able to share the details, and if they do not match, the transfer can be blocked or delayed.
Before sending to an overseas exchange, check that your Korean exchange supports withdrawals to it. Sending to a personal wallet may need extra steps, such as registering the wallet address or proving that it is yours. The conditions differ by exchange and can change, so check your exchange's own guide.
These hurdles are also one reason the kimchi premium does not disappear quickly.
Example
Sending ₩1,500,000 worth from a Korean exchange to an overseas exchange → ₩1,000,000 or more, so the Travel Rule applies (sender and receiver details are checked)
Sending ₩500,000 worth the same way → under ₩1,000,000, so the Travel Rule does not apply (the exchange may still run its own checks)
※ Example numbers, for illustration only
See it on CoinGaja
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