South Korea Reviews Access Restrictions for Unregistered Crypto Platforms

Authorities in South Korea are reviewing access restrictions for unregistered crypto platforms.

South Korea's Financial Intelligence Unit (FIU) is reviewing access restrictions for unregistered crypto platforms, Hankyung reported on March 21. The report came as the agency is inspecting exchanges that did not file as Virtual Asset Service Providers (VASPs) under local law.

Exchanges must register under the Specified Financial Information Act. Without this, they are classified as unregistered crypto exchanges and can face criminal and administrative penalties. The FIU is working with related agencies to identify platforms operating without approval.

These actions expand on South Korea’s crypto regulations in recent years. The FIU is working with the Korea Communications Standards Commission to determine how to block access to unregistered exchanges.

KuCoin South Korea Named in Compliance Probe

The FIU is focusing on exchanges providing services to South Korean users despite not registering as VASPs. The platforms offered Korean-language support and ran local marketing activities, which would place them under the VASP requirements.

KuCoin South Korea was named by Hankyung as one of the platforms being inspected by the FIU. A KuCoin representative told CoinChapter.com that the exchange is closely monitoring regulatory developments in all jurisdictions, including Korea.

“At KuCoin, we believe that compliance is essential for the healthy and sustainable growth of the crypto industry—this has always been our stance and will continue to guide us as we move forward. We remain committed to supporting the industry’s long-term development through proactive and responsible practices.”

The statement did not confirm whether KuCoin South Korea had filed any documentation with local regulators. The FIU is still considering further actions, including access blocks.

Unregistered Crypto Exchanges Face Legal Consequences

Under current South Korean crypto regulations, companies involved in crypto trading, custody, or management must report to the FIU. If exchanges fail to meet these requirements, authorities classify them as unregistered and impose legal consequences.

An FIU official confirmed that consultations are ongoing. The Korea Communications Standards Commission is assessing the process for limiting access to platforms on the FIU’s list.

The list of exchanges has not been disclosed yet. However, local sources say that multiple platforms, including large global exchanges, are being inspected.

Bithumb Investigation Highlights Scrutiny of Local Exchanges

On March 20, prosecutors launched an investigation into Bithumb after suspecting that its former CEO Kim Dae-sik misused company funds to buy an apartment in Seoul. Authorities are checking for any violations of financial laws.

Bithumb stated that Kim repaid the amount using a personal loan. The investigation is ongoing, and no charges have been filed yet.

Additionally, questions were raised about listing fees. Anonymous sources also told Wu Blockchain that some projects paid large sums to secure listings on Upbit and Bithumb. These claims mentioned intermediaries allegedly collecting millions of dollars from projects for these listings.

Following these reports, Upbit responded to the assertions and asked Wu Blockchain to disclose the names of the digital assets involved in the alleged listing fee payments. Upbit stated that it has never collected any funds from projects for listing their tokens on its exchange.

The company also noted that it does not have any plans to take legal action regarding the report.