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16 crypto platforms could be banned in South Korea

 


The Korea Financial Intelligence Unit (KoFIU) informed investigating authorities about illegal business activities of 16 unregistered Virtual Asset Service Providers (VASP). These crypto platforms operate in the country of South Korea without permission.


In a notice published on Aug. 18, KOFIU listed some known crypto platforms that violate the Information Law for Specified Financial Transactions in South Korea.


Platforms mentioned include KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.


Unregistered crypto platforms expect tough measures

The regulator found that “(…) the 16 overseas-based VASPs engaged in business activities targeting domestic consumers.” The KOFIU justified this by saying that the VASPs “(…) offer Korean-language websites, run promotional events for South Korean consumers, and provide credit card payment options for digital assets ”.


Additionally, the agency advised users to take "extra care" when dealing with unregistered Virtual Asset Service Providers (VASPs) to avoid " damage ."


The circular follows an earlier notice dated July 22, 2021, directing overseas-based VASPs to apply for registration in order to conduct business in the country. The KoFIU stated that “the authorities intend to take the necessary measures” if that is not the case.


These actions may include notifications from the Financial Intelligence Units (FIUs) in the home countries of the 16 unregistered VASPs. In South Korea, according to the authority , registration as a VASP may also be restricted for a certain period of time as well. Furthermore, illegal business activities are punishable by a maximum of five years imprisonment or a fine of 50 million KRW (about 37,750 US dollars).


Illegal VASPs are to be disadvantaged by new regulations

In addition to suspending crypto exchanges’ operations, authorities may make cryptocurrency transfers “impossible” between registered and unregistered platforms.


The notice further states: “The KoFIU calls on the Communications Commission of Korea and the Communications Standards Commission of Korea to block domestic access to the websites of unregistered VASPs . With this, the KoFIU wants to “prohibit the use of virtual asset services offered by unregistered companies” .


In addition, according to the notice, credit card companies will also be ordered to cut ties with the "illegal" platforms , while authorities continue to monitor activity in the industry.


Just last week, Singapore-based Crypto.com acquired two South Korean crypto companies . This allows Crypto.com to operate as a registered virtual asset provider under the country's Electronic Financial Transaction Act .


In view of the crackdown, the South Korean police are also experimenting with confiscating virtual assets in other civil crimes. Be[In]Crypto previously cited reports suggesting that the country's financial regulators may also reconsider the current legislation. The FSC has already formed a task force to create a legal framework for crypto assets .


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All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action that the reader takes based on the information found on our website is entirely at their own risk.

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