DAXA urges South Korea to rethink 10M-won overseas-transfer STR mandate
The exchange group warns the proposal could lift annual STR filings at top venues to more than 5.4 million.
South Korea’s exchange industry body DAXA is pushing regulators to revise proposed AML amendments that would force suspicious-transaction reporting on overseas-linked crypto transfers above 10 million won, regardless of risk. The lobbying effort lands as Upbit, Bithumb, and Coinone pursue court challenges to FIU sanctions tied to alleged AML failures.
Key Takeaways
- Proposed AML amendments would require South Korean VASPs to file suspicious transaction reports for overseas-linked virtual asset transfers of 10 million won (about $6,800) or more, even when risk signals are absent.
- DAXA estimates STR volumes at the five largest exchanges could rise from roughly 63,000 last year to more than 5.4 million annually.
- The submission was framed as an industry position representing 27 registered VASPs, including Upbit, Bithumb, Coinone, Korbit, and Gopax.
- The public notice window runs through May 11, with final rules expected in July after regulatory and legal review.
DAXA Pushes Back on 10M-Won Overseas-Transfer STR Requirement
South Korea’s Digital Asset eXchange Alliance (DAXA) submitted formal comments opposing proposed anti-money laundering amendments that would hardwire suspicious-transaction reporting into cross-border crypto flows.
Under the draft, domestic virtual asset service providers (VASPs) conducting virtual asset transfers with overseas VASPs would have to report transactions of 10 million Korean won (about $6,800) or more as suspicious regardless of risk level. In practice, that turns a risk-based tool into a threshold-based obligation. For market participants, the distinction matters because it changes the default handling of routine overseas-linked transfers from “monitor and escalate when warranted” to “file by rule.”
DAXA also objected to a proposed requirement to verify the accuracy of customer information, arguing that lower-level supervisory rules are adding obligations not clearly set out in the underlying Specific Financial Information Act.
An 85x STR Surge: What DAXA Says Changes Operationally for Exchanges
DAXA’s core warning is operational. The group estimated the proposal could increase suspicious transaction reports from South Korea’s five largest exchanges by 85 times, from about 63,000 cases last year to over 5.4 million a year.
That scale implies a compliance workload shock concentrated at the largest venues, where the bulk of fiat on-ramps and cross-border user activity sits. Even if filing becomes more automated, the second-order effect is process congestion. More mandatory STRs can mean more internal review queues, more customer friction around withdrawals and transfers, and more points where operations teams choose conservative throttles to avoid enforcement risk.
DAXA positioned the comments as reflecting the views of 27 registered VASPs, including Upbit, Bithumb, Coinone, Korbit and Gopax. That matters for regulators reading the room. This is not a single exchange trying to negotiate its own edge case. It is a coordinated industry stance aimed at reshaping the final language before it becomes binding.
Rulemaking Clock: May 11 Comment Deadline, July Finalization Target
The Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU) proposed the amendments on March 30, opening a public notice period through May 11. The rules are expected to be finalized in July after regulatory and legal review.
The near-term signal is whether regulators extend the notice period or publish revisions that respond to DAXA’s objections. The real hinge for market structure is July’s final text: whether overseas-linked transfers at or above 10 million won remain STR-mandated regardless of risk level, or whether the framework is pulled back toward a risk-based standard.
Courtroom Backdrop: Upbit, Bithumb, and Coinone Seek Relief From FIU Sanctions
The policy fight is unfolding while major exchanges are already litigating FIU enforcement actions.
Upbit operator Dunamu won a first-instance ruling on April 9 canceling a three-month partial business suspension tied to alleged violations involving customer due diligence and transactions with unregistered foreign VASPs. The regulator appealed that decision on April 30.
Bithumb also received court relief after the Seoul Administrative Court suspended enforcement of a six-month partial business suspension until the main case is decided. Coinone, which received a three-month partial business suspension and a 5.2 billion won fine over alleged AML failures, received a temporary reprieve after challenging the sanctions.
Courtroom Backdrop: Upbit, Bithumb, and Coinone Seek Relief From FIU Sanctions
I read the proposed 10 million won trigger as a shift toward de facto mandatory reporting for a wide slice of overseas-linked flow, not a marginal tweak to surveillance. The threshold that matters is whether the final July language keeps “regardless of risk level,” because that is what turns STRs into a volume problem rather than a targeting tool.
The real test is whether the regulator’s posture hardens or softens while the Upbit appeal and the Bithumb and Coinone main cases move forward. If court proceedings keep constraining FIU sanctions in the near term, the setup starts to look like a negotiation over implementation mechanics rather than a clean enforcement escalation, and the practical impact will show up as transfer friction and operational throttles at the largest venues, not as a one-day market shock.
