South Korean financial intelligence units are taking legal action against 16 foreign crypto exchanges operating illegally within the country. “For illegal business activities of unregistered entities, maximum of 5 years of imprisonment or up to KRW 50 million of fines can be imposed,” the regulator said.
South Korean Regulator Flags 16 Foreign Crypto Exchanges
South Korea’s top financial regulator, the Financial Services Commission (FSC), announced Thursday that the country’s financial intelligence unit (KoFIU) has notified investigative authorities about the illegal business activities of 16 unregistered virtual asset service providers (VASPs).
The KoFIU is South Korea’s financial intelligence unit (FIU) and the lead agency in the Asian country for anti-money laundering and countering financing of terrorism (AML/CFT) matters.
These 16 entities include Kucoin and MEXC as well as Phemex, XT.com and Bitrue.
The regulator stated that all 16 cryptocurrency exchanges were based in Korea and have no formal presence within the country. They also claimed they are engaging in domestic crypto-business activities. You can find them on Korean-language websites. They also host promotions for Korean users and offer a payment option which allows you to buy crypto assets in Korea using your credit card.
On July 22, 2017, the KoFIU informed foreign-based cryptocurrency exchanges that they had to register with it. The 16 entities mentioned above continued operating in South Korea despite not being registered.
This is the authority:
Unregistered businesses can be subject to maximum 5 years in prison or KRW 50,000,000. [$38,000]A restriction on registration as VASP in the domestic market can result in fines.
According to the regulator, financial authorities from the countries hosting these service providers will receive information and credit card processing in those jurisdictions will stop in the domestic market. In addition, “Transfers of virtual assets to and from the 16 unregistered entities will be made impossible as the authorities have issued an administrative guidance requiring suspension of transactions between the registered and unregistered entities,” the KoFIU described.
Emphasizing that “the authorities plan to take necessary measures” to stop crypto service providers from operating without registration in South Korea, the regulator stressed:
KoFIU will monitor unregistered businesses closely and continue its close cooperation with the relevant authorities.
How do you feel about South Korea’s regulator taking legal action against illegal crypto-exchanges in South Korea? Comment below.
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