South Korea To Block KuCoin, Others In Crackdown On Unregistered Crypto Exchanges

Twitter icon  •  Published 3 months ago  •  Hassan Maishera

The South Korean Financial Services Commission (FSC) has revealed that it is cracking down on 16 cryptocurrency exchanges for failing to register with the authorities.

South Korean authorities are cracking down on 16 cryptocurrency exchanges for failing to register their activities.

The South Korean Financial Services Commission (FSC) announced in a press release on Thursday that it is cracking down on 16 cryptocurrency exchanges for failing to register with the authorities. 

The FSC said South Korean customers could lose access to these crypto exchanges, as local authorities clamp down on foreign businesses who they say are operating in the country without proper registration.

According to the FSC, these exchanges are; KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex. The FSC said;

“The Korea Financial Intelligence Unit (KoFIU) announced on August 18 that it has notified illegal business activities of 16 unregistered Virtual Asset Service Providers (VASPs) to the investigative authority. The KOFIU urged virtual asset users to practice extra caution in order to avoid incurring damages that may result from their transactions with unregistered VASPs.

The 16 foreign-based VASPs were found to have been engaged in business activities targeting domestic consumers by offering Korean-language websites, having promotional events targeting Korean consumers and providing a payment option that supports the purchase of virtual assets using credit cards. On July 22, 2021, the KoFIU notified foreign-based VASPs that have business operations targeting Koreans about their obligation to register their business with the authority pursuant to the Act. However, the 16 aforementioned entities were found to have business operations targeting Koreans without obtaining registration, and thus the authorities plan to take necessary measures.”

The FSC added that it is now looking to block domestic access to the websites of unregistered VASPs to prevent the use of virtual asset services provided by unregistered entities.

Furthermore, credit card companies will inspect and block credit card-based virtual asset purchase and payment services offered by foreign-based VASPs to disable their use in the domestic market. Finally, transfers of virtual assets to and from the 16 unregistered entities will be made impossible as the authorities have issued administrative guidance requiring suspension of transactions between the registered and unregistered entities, the FSC added.

By failing to register their companies, these entities could pay a penalty of 50 million Korean won ($38,000).

At press time, KuCoin and the other cryptocurrency exchanges are yet to comment on this latest development.

Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.

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