South Korea’s financial intelligence unit has taken action against 16 foreign cryptocurrency exchanges for operating illegally in the country.” For illegal business activities of unregistered entities, the regulator said, “up to five years in prison or a fine of up to 50 million won can be imposed.
Sixteen foreign crypto exchanges flagged by South Korean regulators
South Korea’s top financial regulator, the Financial Services Commission (FSC), said Thursday that the country’s Financial Intelligence Unit (KoFIU) has notified investigators of illegal business activities of 16 unregistered virtual asset service providers (VASPs).
The KoFIU is South Korea’s Financial Intelligence Unit (FIU) and is the Asian country’s lead agency on anti-money laundering and combating the 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 Korea without a formal domestic presence, the regulator said, adding that they were found to be engaged in crypto business activities targeting domestic consumers. For example, they offer a Korean language website, hold promotional events targeted at Korean consumers, and offer payment options that support the purchase of crypto assets using domestic credit cards.
The KoFIU notified foreign-based crypto exchanges last July 22 that they must register their business with the authorities. However, the 16 aforementioned entities continued to operate in Korea without obtaining registration.
The authorities detailed.
For illegal business activities of unregistered entities, the authorities may impose up to five years in prison or a fine of up to 50 million won ($380,000) and restrict their registration as a VASP in the domestic market for a certain period.
The regulator explained that it will notify the competent financial authority that accepts the service provider and suspend related credit card payments in the domestic market. KoFIU also explained that “the transfer of virtual assets to and from 16 unregistered operators will be impossible because the authorities have issued an administrative directive requiring the suspension of transactions between registered and unregistered operators.”
“The authorities will take the necessary measures” to stop crypto service providers operating without registration in South Korea, the regulator stressed.
The KoFIU will continue to closely monitor illegal business activities conducted by unregistered operators and maintain close cooperation with the relevant authorities.
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