In an attempt to strengthen regulatory oversight, South Korea has launched a crackdown on unregistered overseas crypto exchanges operating in the country. The country’s Financial Intelligence Unit (FIU) has identified multiple platforms illegally functioning in the country. Reportedly, crypto exchanges such as KuCoin and BitMEX face increased scrutiny for failing to register as virtual asset service providers (VASPs) under the Specific Financial Information Act.
South Korea Targets Unregistered Crypto Exchanges
As part of South Korea’s crypto regulatory efforts, the Financial Intelligence Unit has cracked down on multiple crypto exchanges alleged of illegally operating in the country. These platforms include BitMEX, KuCoin, CoinW, Bitunix, and KCEX.
While these exchanges have reportedly failed to register as virtual asset service providers (VASPs) under the Specific Financial Information Act, they face increased scrutiny. They have been found to be operating Korean websites, targeting local investors with marketing and customer support, all without proper registration or disclosure.
An FIU official revealed that the regulator is currently analyzing measures to block access to these crypto exchanges. They further cited,
We are currently reviewing access blocking measures for unreported overseas exchanges that are providing services to domestic investors through consultation with the Korea Communications Standards Commission. We are organizing damage cases and related data to strengthen communication between the authorities, and we expect to take tangible measures within this year.
Kucoin and Other Major Exchanges Targeted for Sanctions
According to local reports, South Korea crypto exchanges such as BitMEX, KuCoin, CoinW, Bitunix, and KCEX are deemed as illegally operating in the country. As they have failed to adhere to proper regulatory norms, the FIU targets them for sanctions.
Notably, the financial watchdog has initiated procedures to take proper actions against these crypto exchanges. With intense scrutiny, the FIU is consulting with relevant organizations to proceed further.
This development follows the nation’s recent rejection of the notion of a strategic Bitcoin reserve. The Bank of Korea has dismissed the possibility of adopting a crypto reserve citing its volatile nature and inherent risks.
In addition, the Bank of Korea is currently experimenting with its CBDC project. The central bank will launch a CBDC pilot program in April, possibly lasting for three months.
South Korea’s Crypto Regulations: An Overview
The country has been introducing comprehensive measures to oversee the crypto industry. The country’s main objective is to maintain a balance between market growth and user protection.
Recently, the country announced its decision to implement solid anti-money laundering regulations. South Korea revealed its potential regulatory revamp with a specific focus on the AML rules.
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