New Measures Against Unregistered Exchanges
In a significant move to regulate the cryptocurrency market, South Korean financial authorities are gearing up to impose sanctions on crypto exchanges operating without proper registration in the country. The business newspaper Hankyung reported on Friday that the Financial Intelligence Unit (FIU) has identified several exchanges as targets for these upcoming sanctions.
Identifying Illegal Operations
The FIU has classified a number of exchanges as illegal businesses due to their failure to register as Virtual Asset Service Providers (VASPs). Among the exchanges facing scrutiny are BitMEX, KuCoin, CoinW, Bitunix, and KCEX. These platforms have been found to be running Korean-language websites while neglecting to report their operations to the FIU, which violates South Korean regulations.
Potential Access Restrictions
In an effort to protect domestic investors, an FIU official stated, “We are currently reviewing the possibility of blocking access to unreported overseas exchanges that are providing services to domestic investors.” This assessment is being conducted in consultation with the Korea Communications Standards Commission, highlighting the government’s commitment to enforcing compliance in the crypto sector.
Strengthening Regulatory Measures
The FIU is actively organizing data related to instances of damage caused by these unregistered exchanges, which will aid in enhancing communication between regulatory authorities. The official expressed optimism, stating, “We expect to see tangible measures taken within this year.” This suggests that swift action may be on the horizon as regulators tighten their grip on the crypto market.
Recent Developments in the Crypto Space
In a related development, last month, South Korean crypto exchange Upbit faced sanctions of its own. The platform was barred from allowing new customers to transfer assets for three months due to non-compliance with its regulatory obligations. This incident underscores the increasing scrutiny that crypto exchanges are facing in South Korea.
Industry Response
Despite the looming sanctions, major players like BitMEX, KuCoin, and CoinW have not yet responded to inquiries from CoinDesk regarding the situation. As the landscape continues to evolve, the cryptocurrency sector in South Korea is under significant pressure to adhere to regulatory standards.
As these developments unfold, stakeholders in the crypto market will be watching closely to see how the South Korean authorities implement these sanctions and what impact they will have on both local and international exchanges.
