South Korean Regulators Take Action Against 16 Foreign Cryptocurrency Exchanges – Regulated Bitcoin News

South Korea’s Financial Intelligence Unit is taking action against 16 foreign cryptocurrency exchanges that operate illegally in the country. “For illegal business activities by unregistered entities, the penalty is imprisonment for up to five years or a fine of up to 50 million won,” the regulator said.

16 foreign cryptocurrency exchanges flagged by South Korean regulators

South Korea’s top financial regulator, the Financial Services Commission (FSC), announced on Thursday that the country’s Financial Intelligence Unit (KoFIU) has notified investigating authorities of the illegal business activities of 16 unregistered virtual asset service providers (VASPs).

KoFIU is South Korea’s Financial Intelligence Unit (FIU) and the lead agency for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) in Asia.

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 cryptocurrency exchanges are located outside of South Korea and have no formal domestic operations, the regulator said, adding that they were found to be engaged in crypto business activities aimed at domestic consumers. For example, they offer a Korean-language website, host promotions aimed at Korean consumers, and offer payment options that support the purchase of crypto assets with credit cards in the country.

KoFIU notified foreign cryptocurrency exchanges on July 22 last year that they must register their operations with the authorities. However, the 16 entities mentioned above continued to operate in South Korea without being registered.

Authorities detail:

Imprisonment of up to 5 years or less than KRW 50 million for illegal business activities by unregistered entities [$38,000] Fines and restrictions apply to users who register as VASPs in the domestic market for a certain period of time.

The regulator explained that the financial authorities in the jurisdiction where the service provider is located will be notified and related credit card processing will be stopped in the domestic market. In addition, “transfers of virtual assets between the 16 unregistered entities will not be possible due to an administrative guidance issued by the authorities to suspend transactions between registered and unregistered entities,” KoFIU described.

The regulator stressed that “the authorities plan to take the necessary steps” to prevent crypto service providers from operating without registration in South Korea, stressing:

KoFIU will continue to closely monitor the illegal operations of unregistered entities and maintain close cooperation with relevant authorities.

What do you think of South Korean regulators taking action against cryptocurrency exchanges operating illegally in the country? Let us know in the comments section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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