South Korea Cracks Down On Non-Compliant Crypto Platforms, Including BitMEX And KuCoin

Multiple cryptocurrency exchanges will face financial sanctions because they operate against South Korean laws. The Financial Intelligence Unit (FIU) now considers unregistered Virtual Asset Service Providers (VASPs) targets for law enforcement action.

The Financial Intelligence Unit (FIU) in South Korea is targeting several cryptocurrency platforms, including BitMEX and KuCoin, for potential financial sanctions. This move comes as part of the country’s broader campaign to regulate the booming crypto market and protect investors from potential harm.

Non-Compliant Crypto Platforms Could Face Sanctions in South Korea

Several cryptocurrency exchanges could face financial sanctions in South Korea for operating against the country’s laws. The FIU is now considering what action to take against the Virtual Asset Service Providers (VASPs).

Indeed, the platforms are not registered and continue to provide services to the country’s investors. Several virtual currency trading platforms maintain Korean-language websites but do not comply with the country’s regulatory mandate to report their activities, thereby violating the nation’s stringent financial regulations.

The Specified Financial Information Act requires registration with the FIU for all platforms offering virtual asset exchange services and custody or brokerage functions or management capabilities.

A high-ranking official at the FIU said their organization is studying what potential sanctions would apply to these cryptocurrency exchanges. The Korea Communications Standards Commission (KCSC) is now consulting with officials to devise methods for blocking these platforms.

Furthermore, South Korean authorities have underscored their commitment to enforcing national regulatory norms as they aim to safeguard home investors and stabilize market conditions.

KuCoin and Another Platform Respond to Allegations

KuCoin is among the exchange platforms being investigated. A spokesperson for the platform expressed their dedication to adhering to both global regulatory standards and the laws of the land.

The spokesperson stated that they actively track regulatory changes across all jurisdictions. The future prospects for KuCoin and another platform to satisfy the country’s regulatory requirements remain unclear.

Authorities in South Korea are continuing to enforce regulatory standards against exchanges by investigating administrative and criminal penalties for entities that fail to meet compliance standards.

The blocking of platform access by the country’s authorities poses risks to users who trade crypto as it will could constrain their ability to access these services.

Broader Context of South Korea’s Crypto Oversight

The South Korean government prioritizes crypto sector regulation as a key strategic goal. It has implemented stringent protocols to promote transparency, deter monetary illicit transactions, and combat fraudulent schemes.

The country’s restrictive measures are intended to shield cryptocurrency investors from market volatility fluctuations and risks.

Aside from the regulation of foreign cryptocurrency exchanges, South Korean local platforms are now facing enhanced oversight. The South Korean prosecution team searched Bithumb’s headquarters after discovering financial misconduct connected to the exchange’s previous CEO.

All digital cryptocurrency exchanges in the country face greater supervision, demonstrating South Korea’s efforts to maintain financial sector compliance and integrity.