South Korean crypto businesses scramble to meet FATF travel rule

Around 30 South Korean crypto and blockchain firms have officially started partnering with CODE, a joint venture formed to meet the Financial Action Task Force (FATF) travel rule.

Fast facts

• FATF’s travel rule is a global set of guidelines for virtual asset service providers (VASPs) designed to combat money laundering and terrorist financing by requiring crypto firms to collect and disclose customer information for transactions above a threshold of US$1,000.

• CODE’s travel rule solution uses blockchain to record transactions and customer data on nodes operated by member entities in a distributed server. 

• CODE has completed testing its solution on its three shareholders — Bithumb, Coinone and Korbit — and is reviewing partnerships with various domestic and international crypto service providers, Bithumb announced on Friday. 

• South Korea’s largest crypto exchange Upbit’s operator Dunamu is not a CODE member and has developed its own travel rule solution VerifyVASP. 

• South Korea has mandated the travel rule for all transactions over a million Korean won (US$831.12), which will be in full effect from March 25. 
• Global exchanges have been hesitant to incorporate FATF’s travel rule due to privacy concerns, but South Korea will be one of the first countries in the world to embrace the condition for local businesses.