Korea Financial Intelligence Unit, a top South Korean regulator of financial services, has urged consumers to check whether overseas cryptocurrency exchanges have been registered with the Korean financial authority.
The watchdog found that 16 virtual assets service providers (VASPs), failed to register with the financial authorities and were therefore considered illegal business owners in South Korea.
The regulator identified the following crypto exchanges: KuCoin (MEXC), Phemex, XT.com. Bitrue, ZB.com. Bitglobal. CoinW. CoinEX. AAX. ZoomEX. Poloniex. BTCEX. BTCC. DigiFinex.
According to the KoFIU, it informed the investigating authority about illegal crypto exchanges that targeted Korean users through providing Korean-language services.
According to the financial regulator, it requested that the Korea Communications Commission block access to the website of local users by the companies in order to prevent them from operating unregistered businesses in the country.
The KoFIU informed foreign service providers of virtual assets, which are being used by Koreans, to register with the financial regulator in July 2013.
The 16 platforms have so far failed to fulfill the required registration obligation within the specified timeframe.
On Thursday, the KoFIU released a statement stating that “Virtual asset owners should verify whether the VASPs with which they are dealing are legally registered with the authority in accordance with the law.”
The watchdog stated that it will continue to closely monitor illegal business activities of unregistered companies.
Stabilizing local digital asset markets
South Korea’s crypto market grew to more than 55 trillion Korean won (US$42 billion) at the end of 2021, with a total number of users reaching over 15 million people, according to statistics by the KoFIU.
The crash that hit the crypto market in May and June this year adversely affected the Korean market at its prime — affecting around 280,000 investors in South Korea, with many claiming to have lost their life savings and some even taking their own lives.
South Korea’s regulators are currently addressing the repercussions from the multi-billion TerraLUNA disaster.
The authorities promised to build infrastructure for digital finance innovation by developing a regulatory framework for emerging digital sectors like crypto assets and fractional investments, among other things, including the direct involvement of banks in the country’s US$42 billion crypto industry.