South Korea’s Financial Intelligence Unit (FIU) has increased the crackdown on foreign cryptocurrency exchanges operating illegally without registration under the Specific Financial Information Act (SFA). The FIU has identified platforms such as BitMEX, KuCoin, CoinW, Bitunix, and KCEX as targets for sanctions due to their unregistered operation in the region. The exchanges are providing services in Korean languages and catering to the investors without proper registration.
Legal Requirements for Crypto Exchanges
Under the SFA, Virtual Asset Service Providers (VASPs) should be registered with the Financial Intelligence Unit to legally operate in South Korea. Non-compliance is considered illegal, subjecting offenders to criminal and administrative penalties. The FIU is currently investigating these exchanges and consulting with related agencies to implement sanctions.
Sanction Measures Under Review
In order to enforce compliance, the FIU is considering several ways, including blocking access to the websites of these unregistered exchanges. This approach is currently under review in consultation with the Korea Communication Standards Commission.
The FIU had previously requested the blocking of access to 16 unreported overseas exchanges in 2022, which resulted in many platforms withdrawing from the Korean market.
All of this for Investor Protection
An official from the FIU stated, “We are reviewing access-blocking measures through consultation with the Korea Communications Standards Commission for unreported overseas exchange currently providing services to domestic investors.” The official also highlighted that data related to damage cases is being organized to strengthen communication between authorities.
As South Korea continues to navigate its way through these complexities, these steps from the FIU aim to protect domestic investors while ensuring that the operators adhere to the local standards and act accordingly. With expectations of visible actions within this year, the FIU’s initiative reflects a commitment to maintain a safe trading environment for investors in the digital asset space.
Also Read: Is Toncoin Price Ready to Regain $5 Mark?
