South Korean financial authorities will reportedly start sanctions against a list of overseas crypto exchanges for operating without proper licensing.
By Wahid Pessarlay
Edited by Julia Sakovich
Updated
3 mins read
Financial authorities in South Korea will reportedly sanction multiple overseas crypto exchanges that have been illegally operating in the East Asian country.
These centralized exchanges, including KuCoin, CoinW, Bitunix, and KCEX, have been reportedly providing financial services to South Koreans without registering as Virtual Asset Service Providers (VASPs) under the Specific Financial Information Act, according to the local outlet Hankyung.
KuCoin is the largest exchange on the list with a daily trading volume of $850 million, according to data from CoinMarketCap.
The Korea Financial Intelligence Unit (FIU) of the Financial Services Commission, per the report, has been investigating the platforms and claims that the exchanges included in the list have been operating in Korean.
According to the report, the authorities claimed that the overseas exchanges targeted South Koreans without providing marketing and customer support.
Consequently, the agency is considering putting sanctions like blocking access to the listed exchanges’ websites with the help of the Korea Communications Standards Commission.
“Actions will be taken within this year,” FIU said.
Hankyung reports that VASPs must report to the FIU and receive the agency’s approval before engaging in any kind of financial operations.
“Failure to do so will be considered illegal business and subject to criminal punishment and administrative sanctions,” the report reads.
Hankyung also mentioned BitMEX among other crypto platforms on the list. However, BitMEX told Coinspeaker that the sanction relates to a Travel Rule which the exchange has already complied with.
South Korea is considered to be one of the largest crypto markets in the world. The country ranked 19th in the “2024 Global Crypto Adoption Index” report by Chainalysis.
In December 2024, South Korea’s retail crypto trading volume reached the $18 billion mark, outperforming its stock market volume by 22%.
However, the regulatory scene in South Korea has been forcing many local exchanges to cease operations. Last month, Coinspeaker reported that 11 crypto exchanges had to halt their services over the past year due to regulatory pressure.
This brought the total number of active exchanges in the country to 31.
Most of the crypto trading volume in South Korea over the past 24 hours came from its two major exchanges: Upbit ($1.88 billion) and Bithumb ($1.02 billion), according to CMC data.
Even Upbit, the largest crypto exchange in South Korea, received a suspension notice from the FIU in January for failing to comply with the agency’s anti-money laundering (AML) policies.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Wahid has been analyzing and reporting on the latest trends in the decentralized ecosystem since 2019. He has over 4,000 articles to his name and his work has been featured on some of the leading outlets including Yahoo Finance, Investing.com, Cointelegraph, and Benzinga. Other than reporting, Wahid likes to connect the dots between DeFi and macro on his newsletter, On-chain Monk.