key takeaways
- Korea’s financial intelligence unit announced on Thursday that it has found 16 foreign-based cryptocurrency exchanges operating illegally in the country.
- The agency reported unregistered exchanges to the investigating officer, took action to block domestic on their websites, and bar credit card companies from processing payments to them.
- On the list of offenders were major crypto exchanges like KuCoin, Phemex and Poloniex.
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Unregistered crypto exchanges face up to five years in prison or a fine of approximately $37,000, along with a ban on future registration in South Korea.
Korea crack down on unregistered crypto exchanges
The Republic of Korea has threatened legal action against 16 unregistered crypto exchanges.
The Korea Financial Intelligence Unit (KoFIU) announced in a press release on Thursday that it has reported 16 virtual asset service providers to investigating authorities for operating without the required registration in the country. According to KoFIU, 16 firms were found to have “business operations targeted at Koreans without obtaining registration”, including hosting and promoting Korean-language websites targeted at Korean consumers that allow purchasing cryptocurrencies with credit cards. Huh. KuCoin, Phemex, and Poloniex were among the more extensive list of exchanges that are accused of operating illegally in the country.
KoFIU said it notified foreign-based exchanges in July last year about the obligation to register with the Financial Services Commission, but reportedly none of them did so. Now the financial watchdog has threatened to take legal action, including asking unregistered firms to report to the investigative authority, requesting the Korea Communications Commission and Korea Communications Standards Commission to block domestic access to their websites, and blocking crypto purchases. Including employing credit card companies. their paid services.
The agency also said that it will notify relevant authorities in the countries where the subject exchanges are based about their illegal operations in Korea and prohibit all registered entities from processing and interacting with transactions. According to the statement, exchanges could face up to five years in prison or a civil penalty of up to $37,000 and a permanent ban on registration in the country.
Korean authorities began to intensify their investigation into the domestic crypto industry after Terra’s $40 billion collapse in March. Seoul-based Terraform Labs, which includes its Korean co-founders Daniel Shin and Do Kwon, are also under criminal investigation on suspicion of fraud.
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.