South Korea’s financial intelligence unit is cracking down on 16 cryptocurrency exchanges for alleged unregistered illegal activities.
South Korean users may lose access to 16 cryptocurrency exchanges as local officials crack down on unlicensed foreign enterprises, according to a statement made by the Commission Financial Services (FSC).
Accordingly, the FSC reported these platforms to the national investigative agency and requested to block domestic access to their websites. The exchanges included in the list include KuCoin, MEXC, Phemex, XT.com, Bitrue ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.
Officials identified the exchanges as ill-equipped since they lack the Information Security Management System (ISMS) accreditation, putting their users’ personal information in danger.
The FSC believes that the above platforms have targeted Korean customers through their Korean-language websites and promotions to stimulate consumer demand. All of these activities fall under the Financial Transaction Reporting Act.
Penalties for operating illegal business activities for unregistered organizations in South Korea can be up to 5 years in prison or a maximum fine of 50 million Korean won ($38,000).
South Korea has one of the most thorough crypto legal systems. In 2021, the authorities required crypto companies to obtain ISMS certification, causing some crypto exchanges to leave the nation.
However, 35 virtual asset providers might register in the country; five of these exchanges, UpBit, Coinone, Gopax, Korbit, and Bithumb, account for more than 99% of all crypto transactions in the country.
Meanwhile, the recent collapse of the Terra ecosystem has heightened the country’s focus on cryptocurrency regulation.
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