Overview
- South Korea’s Financial Intelligence Unit formally presented the proposal at the FATF plenary in Paris on June 21–22, 2026, calling for lower or removed thresholds that now exempt small virtual asset transfers.
- The plan would require both originating and beneficiary virtual asset service providers to exchange customer identifying data for covered transfers, closing a gap that lets offenders split payments into many small transactions, a tactic called smurfing.
- Korean officials argue the change targets offshore platforms and unregistered services that currently evade controls by refusing to provide identity data, and regulators would be able to block or flag transactions that lack required information.
- The FATF discussion also broadened to cover stablecoins and decentralized finance as routes for cross-border value flows, increasing the scope of oversight beyond traditional exchange-to-exchange transfers.
- If FATF adopts the change, exchanges worldwide would need new identity-collection systems, secure data-sharing links, and larger compliance teams, which would raise costs and add authentication steps for retail users moving funds cross-border.