South Korea Cracks Down on Unregistered Crypto Exchanges
By: Isha Das
South Korea's Financial Intelligence Unit (FIU) has taken decisive action against unregistered overseas cryptocurrency exchanges catering to local users. In a move to safeguard investors and mitigate money laundering risks, the FIU has initiated a ban on 17 foreign crypto exchange applications on Google Play. Major platforms such as KuCoin, MEXC, Phemex, and Poloniex are among those affected by this regulatory clampdown.
According to the FIU, these exchanges failed to comply with local regulations mandating registration with the authorities. The crackdown reflects South Korea's stringent policies that apply not only to domestic but also to international operators targeting Korean users or conducting business in Korean won. Failure to register can lead to significant penalties including fines of up to 50 million won or imprisonment for up to five years.
Extending their enforcement efforts, the FIU is collaborating with Apple Korea and the Korea Communications Standards Commission to restrict access on Apple's App Store, and are actively working to block associated websites. South Korean users have been advised to check the public database of compliant exchanges to ensure their chosen platform is registered. Investors are recommended to withdraw their assets from non-compliant exchanges as a precautionary measure.
This regulatory action occurs amidst a notable growth in cryptocurrency participation within South Korea. Recent data revealed that over 9.6 million South Koreans held accounts with the nation's five major licensed exchanges including Upbit and Bithumb, marking a 52.6% increase. The overall crypto holdings in the country have exceeded 100 trillion won, highlighting the strong confidence in the market. Interestingly, the demographic trend shows a significant surge in participation from older investors, particularly those in their 50s and 60s, who hold substantial digital assets, redefining the landscape of South Korea's crypto sector.
