South Korea’s Financial Intelligence Unit (FIU) in the past week carried out a crackdown on unregistered virtual asset service providers (VASPs), where the agency has now imposed a domestic access restrictions on the Google Play apps of 17 overseas exchanges as per Wu Blockchain.
The Affected Exchanges
The ban has been effective from March 25, and with this ban, users are now unable to install new apps or update existing ones from the platform. These apps include KuCoin, MEXC, Phemex, XT, Biture, CoinW, CoinEX, ZoomEX, Poloniex, BTCC, DigiFinex, Pionex, Blofin, Apex Pro, CoinCatch, WEEX, BitMart. This action has been executed at the request of the Korean FIU, which indicates an effort from the agency’s end to protect investors from potential financial loss.
The main concern that revolves around the unregistered VASPs is that there could be situations where there might be loss of personal information, money laundering activities being carried out, and the loss of user assets. By preventing access to these exchange through Google Play, the FIU is actually protecting the users from these dangers.
Previously in 2022, the agency had recognized 16 unregistered VASPs and 6 in 2023, indicating that the agency is fully committed towards making sure that proper rules and regulations are followed by these exchanges and there minimum to nil investor loss experienced by the users.
Penalties in South Korea for Operating Unregistered Exchanges
According to the law in South Korea, operating a VASPs without proper registration can have severe penalties, which include imprisonment for up to five years and fine reaching 50 million won. The main aim of these regulation is to make sure that there is a secure and transparent cryptocurrency ecosystem within the region.
In addition to the FIU, other regulatory bodies such as Korea Communication Commission and the Korea Communications Standards Commission, have also come together to block access to the websites of these non-compliant exchanges.
This move by the FIU sends out a clear message to the crypto industry the importance of regulatory compliance. As the country continues to refine its approach towards crypto, FIU’s is leaving no stone unturned when it comes to protecting the users and promoting a more secure environment for cryptocurrency trading in South Korea.
