South Korea is tightening its grip on the crypto industry, and this time, foreign exchanges like KuCoin and BitMEX are in trouble. The country’s Financial Intelligence Unit (FIU) has identified multiple crypto platforms operating illegally without proper registration. These exchanges have been offering services to South Korean investors—providing Korean-language websites, marketing, and customer support—without complying with local regulations. Now, authorities are looking into blocking access to these platforms and taking strict action within the year.
Multiple Exchanges Face Sanctions
South Korea takes crypto offenders very seriously and gets on their toes to regulate the crypto industry and prevent financial misconduct. According to local reports, the FIU is working with the Korea Communications Standards Commission to analyze investor damages and enforce stricter oversight. Exchanges that fail to register as Virtual Asset Service Providers (VASPs) under the Specific Financial Information Act are under intense scrutiny. The government is making it clear—if you want to operate in South Korea, you must follow the rules.
KuCoin, BitMEX, CoinW, Bitunix, and KCEX are among the exchanges facing potential sanctions. Local reports suggest that authorities are already consulting with relevant organizations to take action. This comes right after the government rejected the idea of holding Bitcoin as a strategic reserve, citing its volatility and risks. At the same time, the Bank of Korea is moving ahead with its central bank digital currency (CBDC) pilot, which is expected to last three months starting in April.
Bithumb and Upbit Under Investigation
It’s not just foreign exchanges under fire—local platforms are also facing investigations. Prosecutors recently raided Bithumb after suspicions that its former CEO, Kim Dae-sik, embezzled company funds to purchase an apartment. Bithumb denied any wrongdoing, stating that Kim had already taken a loan to repay the funds.
Meanwhile, reports have surfaced that intermediaries were allegedly paid millions to list crypto projects on major South Korean exchanges like Bithumb and Upbit. Upbit responded by demanding transparency and asking for a list of projects involved in these alleged deals.
While such crackdowns look good it is also true that too much scrutiny can drop investors interest in the country. While other countries are putting stress on this trillion-dollar industry South Korea’s tight regulations can only divert the investors to opt for crypto friendly countries to sustain.
