Korean Regulator Takes Action Against 16 Foreign Crypto Exchanges

Korean Regulator Takes Action Against 16 Foreign Crypto Exchanges

Blockchain
August 20, 2022 by
7
The South Korean financial intelligence unit is taking action against 16 foreign cryptocurrency exchanges for operating illegally in the country. “For illegal business activities of unregistered entities, maximum of 5 years of imprisonment or up to KRW 50 million of fines can be imposed,” the regulator said. 16 Foreign Crypto Exchanges Flagged by South Korean
Korean Regulator Takes Action Against 16 Foreign Crypto Exchanges

The South Korean financial intelligence unit is taking action against 16 foreign cryptocurrency exchanges for operating illegally in the country. “For illegal business activities of unregistered entities, maximum of 5 years of imprisonment or up to KRW 50 million of fines can be imposed,” the regulator said.

16 Foreign Crypto Exchanges Flagged by South Korean Regulator

South Korea’s top financial regulator, the Financial Services Commission (FSC), announced Thursday that the country’s financial intelligence unit (KoFIU) has notified investigative authorities about the illegal business activities of 16 unregistered virtual asset service providers (VASPs).

The KoFIU is South Korea’s financial intelligence unit (FIU) and the lead agency in the Asian country for anti-money laundering and countering financing of terrorism (AML/CFT) matters.

The 16 entities are Kucoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, Coinw, Coinex, AAX, Zoomex, Poloniex, BTCEX, BTCC, Digifinex, and Pionex.

All 16 crypto exchanges are based outside of Korea without a formal domestic presence, the regulator said, adding that they were found to be engaging in crypto business activities targeting domestic consumers. For example, they offer Korean-language websites, host promotional events targeting Korean consumers, and provide a payment option that supports the purchase of crypto assets using credit cards in the country.

The KoFIU notified foreign-based crypto exchanges on July 22 last year that they must register their business with the authority. However, the 16 aforementioned entities continued to operate in South Korea without obtaining registration.

The authority detailed:

For illegal business activities of unregistered entities, maximum of 5 years of imprisonment or up to KRW 50 million [$38,000] of fines can be imposed with a restriction for registering as a VASP in domestic market for a certain period of time.

The regulator explained that financial authorities in the jurisdictions hosting the service providers will be informed and related credit card processing will be halted in the domestic market. In addition, “Transfers of virtual assets to and from the 16 unregistered entities will be made impossible as the authorities have issued an administrative guidance requiring suspension of transactions between the registered and unregistered entities,” the KoFIU described.

Emphasizing that “the authorities plan to take necessary measures” to stop crypto service providers from operating without registration in South Korea, the regulator stressed:

The KoFIU will continue to closely monitor illegal business activities carried out by unregistered entities and maintain close cooperation with relevant authorities.

What do you think about the South Korean regulator taking action against crypto exchanges operating illegally in the country? Let us know in the comments section below.

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