South Korea’s Financial Services Commission (FSC) reported 16 foreign crypto exchanges to investigative agencies for disregarding the Specific Financial Information Act.
According to the reports, the law prevents unlisted crypto exchanges from operating without a license, but the 16 firms have been delivering crypto services for Koreans and hosting events targeting Koreans.
The concerned exchanges include MEXC, KuCoin, CoinEX, CoinW, ZB.com, Bitglobal, Bitrue, Poloniex, BTCEX, Phemex, XT.com, BTCC, Pionex,, DigiFinex, AAX, and ZoomEX.
The report revealed that the violation was discovered by the Financial Information Analysis Institute arm of the FSC. The regulators had informed the firms about their responsibility to report their operations, but they failed to comply with them.
FSC plans to block KuCoin, Poloniex, and others
The FSC wants to block these exchanges’ continuous operation within its jurisdiction.
It has asked the Broadcast and Communications Commission and the Korea Communications Commission to block domestic access to their respective websites.
Meanwhile, the regulator also wishes to bar credit card companies from yielding their services to these firms.
Reason for Blocking exchanges: Do not have an ISMS certificate
Officials conveyed that the exchanges as ill-equipped because they do not have the Information Security Management System (ISMS) certificate. This means their users risk having their personal details leaked.
Apart from that, the officials added that malicious actors could also operate the exchanges to launder money. Under the Act, an individual using an unregistered and illegal exchange could be detained for up to 5 years or fined 50 million won i.e. roughly around $37,900.
In addition, the operator will also be unable to register as a domestic virtual asset operator for approximately five years. The law applies to both local and foreign exchanges operating within the country.
Similar: South Korean prosecutors target 7 exchanges linked to terraform
South Korea’s crypto regulations
The country has one of the most extensive legal frameworks for the crypto industry.
In 2021, the authorities directed crypto firms to get the ISMS certification. This itself lead to the exit of several crypto exchanges from the country. Still, 35 virtual assets providers could register locally 5 of those exchanges, UpBit, Coinone, Korbit, Gopax, and Bithumb, are accountable for over 99% of the transactions in the country.
The strong measures from the country are due to the recent collapse of the Terra ecosystem.
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