South Korean Financial Authorities Will reportedly Sanction Multiple Overseas Crypto Exchanges Operating in the Country

These centralized exchanges, including BitMEX, KuCoin, CoinW, Bitunix, and KCEX, have been reportedly providing financial services to South Koreans

Financial authorities in South Korea will reportedly sanction multiple overseas crypto exchanges for allegedly operating in the East Asian country without proper registration.

The Korea Financial Intelligence Unit (FIU) of the Financial Services Commission is planning to take action against several centralized exchanges, including BitMEX, KuCoin, CoinW, Bitunix, and KCEX, for allegedly providing financial services to South Koreans without registering as Virtual Asset Service Providers (VASPs) under the Specific Financial Information Act, local outlet Hankyung reports.

KuCoin is the largest exchange on the list with a daily trading volume of $850 million, according to data from CoinMarketCap. The exchange, which is known for offering derivatives trading and a wide range of cryptocurrencies, reportedly has around 9.3 million users.

The FIU has reportedly been investigating the platforms and claims that the exchanges included in the list have been operating in Korean and providing marketing and customer support to attract local users.

However, the agency said that the overseas exchanges targeted South Koreans without providing any marketing or customer support.

“We will take measures such as blocking access to their websites with the help of the Korea Communications Standards Commission,” FIU said.

“Actions will be taken within this year.”

VAPs 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 noted.

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, overtaking 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.