Story Highlights
- Korea FIU targets illegal crypto exchanges for strict sanctions.
- Unregistered platforms like BitMEX and KuCoin face penalties.
- Authorities plan to block access to illegal exchanges.
The Korea Financial Intelligence Unit (FIU) is taking action against overseas cryptocurrency exchanges operating illegally in Korea. The unregistered exchange operations provide services to Korean users without complying with the county financial regulations. The FIU has started building sanctions to be imposed against these exchanges.
The FIU targets the cryptocurrency exchanges CoinW, KuCoin and Bitunix with KCEX under investigation. These trading platforms operate in Korea through unapproved commercial activities. The exchanges operate Korean-language websites and deliver customer support to local investors in addition to their unauthorized operations. Their business activities violate Korean law provisions.
The activities need to be stopped through combined efforts of the FIU together with other government agencies. The authorities now focus on taking blocking these platforms as one primary action step. The FIU plans to develop this strategy with the Korea Communications Standards Commission. The agency collaborates with different organizations to finalize the planned sanctions.
Korea FIU Enforces Stricter Rules on Crypto Businesses
All companies providing virtual asset trading services and their subsidiaries within Korea must register with the FIU under the Special Financial Transactions Act. Any company that disregards this registration process will be classified as an illegal business. This failure to register places them at risk of criminal prosecution alongside receiving administrative penalties.
The FIU has previously taken steps against unregistered exchanges. In 2022 the agency established barriers that prevented 16 foreign crypto exchanges from operating in the country since they neglected to register. The authority simultaneously partnered with Korean credit card companies to stop platform users from making cryptocurrency purchases. The exchange platforms decided to abandon the Korean market which led them to cease operations on new users.
The authorities have started reinstituting strict control measures against unruly crypto platforms. The implementation of sanctions by the FIU could push additional exchanges to conform with Korean regulations or end their operations in the local market. As a sign of their substantial investor protection initiative, the country underscores its dedication to enforcing legal implementation for all cryptocurrency platforms.
