South Korea's crypto exchanges push back on proposed AML rule mandating STRs for cross-border transfers above 10 million won

May 4 — DAXA, the Digital Asset Exchange Alliance representing 27 registered Virtual Asset Service Providers (VASPs), has lodged objections to a proposed revision of the Enforcement Decree under South Korea's Specific Financial Information Act, according to Yonhap News. The draft, put forward by the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU), would require domestic VASPs to file a Suspicious Transaction Report (STR) for any virtual-asset transfer involving an overseas VASP once the amount reaches 10 million Korean won (about $6,800) or more, regardless of the transaction's risk level. DAXA said the rule would make compliance effectively unworkable. It estimates the annual STR volume for the country's five major exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—would jump about 85-fold, from roughly 63,000 reports last year to more than 5.4 million. The alliance also opposed a separate proposal requiring verification of the accuracy of customer information, arguing that such duties are being added through subordinate regulations without an explicit basis in the law. The pushback comes alongside ongoing legal disputes between exchanges and financial regulators. On April 9, a court overturned part of the business suspension imposed on Dunamu, the operator of Upbit, though regulators have appealed. On April 30, a court halted a six-month partial business suspension against Bithumb. Coinone has also obtained a temporary stay of enforcement. The public comment period for the proposed rules runs through May 11. Finalization is expected in July following regulatory and legal review, underscoring the friction between Korea's push to tighten crypto anti-money-laundering controls and industry concerns over escalating compliance burdens.