South Korea Targets Foreign Crypto Exchanges with Stricter Regulations
South Korea is ramping up its oversight of the cryptocurrency market, with foreign exchanges like KuCoin and BitMEX now under investigation for operating without the necessary registrations.
The country’s Financial Intelligence Unit (FIU) has identified several crypto platforms offering services to local investors, including Korean-language support and marketing, while bypassing South Korean regulations. As a result, authorities are considering blocking access to these exchanges and taking more stringent actions before the end of the year.
Several crypto exchanges are facing possible penalties for failing to comply with South Korea’s rules. The FIU, in collaboration with the Korea Communications Standards Commission, is intensifying efforts to assess potential damages to investors and ensure stricter enforcement. Platforms that are not registered as Virtual Asset Service Providers (VASPs) under the Specific Financial Information Act are under close scrutiny. South Korean authorities are sending a clear message: to operate in the country, businesses must adhere to local laws.
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Exchanges like KuCoin, BitMEX, CoinW, Bitunix, and KCEX are among those in danger of facing sanctions. Authorities are already working with relevant agencies to take action against these platforms. This crackdown follows the government’s rejection of Bitcoin as a strategic reserve due to concerns over its volatility, while the Bank of Korea continues its plans to trial a central bank digital currency (CBDC) beginning in April for a three-month period.
In addition to foreign platforms, South Korea’s domestic exchanges are also under investigation. Bithumb is facing scrutiny after a raid linked to suspicions of its former CEO embezzling funds for personal purchases. The company has denied the accusations, stating that the funds had been repaid via a loan. Meanwhile, Upbit is also under investigation for claims that intermediaries were paid substantial amounts to list certain crypto projects. The exchange is demanding transparency regarding these allegations.
While South Korea’s stringent regulatory measures aim to curb illicit activity in the crypto space, there are concerns that excessive regulations could drive investors to other more crypto-friendly jurisdictions. As the global crypto industry continues to expand, South Korea’s tight control might push investors toward countries offering more relaxed regulatory environments.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
