The Korea Financial Intelligence Unit (KoFIU) said it has alerted the investigating authority about illegal business activities of 16 unregistered Virtual Asset Service Providers (VASPs) operating in South Korea.
In a release published on August 18, KOFIU listed some of the popular platforms for reporting and using the Specified Financial Transaction Information Act violations while being unregistered domestically. The names of the violators include KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.
Action on unregistered businesses
The regulator noted, “16 foreign-based VASPs engaged in business activities targeting domestic consumers by offering Korean-language websites, conducting promotional programs targeted to Korean consumers, and providing payment options that used credit.” Used to support the purchase of virtual assets by doing cards.”
In addition, the agency also advised users to take “extra caution” when dealing with unregistered Virtual Asset Service Providers (VASPs) to avoid “incurring losses”.
The circular follows an earlier notification issued on July 22, 2021, which directed foreign-based VASPs to obtain registration to conduct business in the country. Now, KoFIU underlines that “the authorities plan to take the necessary measures” behind the failure to do so.
Actions may include notifying Financial Intelligence Units (FIUs) in each of the home countries of the 16 unregistered VASPs. Meanwhile, in South Korea, the agency says a ban on registering as a VASP could be imposed for a specific period, with a maximum prison sentence of five years or KRW50 million (about $37,750) for illegal business activities. fine may be imposed.
Illegal VASPs to be deprecated as new rules require
While suspension of operations for these platforms is on the cards, the agencies will reportedly make it “impossible” for crypto to move between registered and unregistered platforms.
The release also noted, “The KoFIU has requested the Korea Communications Commission and the Korea Communications Standards Commission to block domestic access to the websites of unregistered VASPs to prevent the use of virtual asset services provided by unregistered entities.” “
In addition, credit card companies are also directed to cut ties with these “illegal” platforms as per the circular, as the agencies continue to monitor activity within the sector.
That said, just last week, Singapore-based Crypto.com acquired two local businesses in South Korea to act as a registered virtual asset service provider under the country’s Electronic Financial Transactions Act.
Meanwhile, amid the crackdown, South Korea’s police force is experimenting with confiscation of virtual assets for other civil crimes. Happen[In]Crypto has previously cited reports that suggest the country’s financial regulator may also revisit its existing legislation as the FSC launched a joint task force to establish the crypto framework.
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