South Korea is cracking down on unregistered crypto platforms as a statement released on Monday revealed that the regulators have asked Apple to block 14 related apps from the local App Store in a move to tighten the oversight of illegal crypto activity and protect the users.
Major exchanges like KuCoin and MEXC are being targeted, with South Korean regulators already blocking domestic access to their apps since April 11.
Foreign Crypto Firms Must Report to FIU Before Operating
The statement remarked that foreign virtual business operators that wish to engage in domestic business activities, must report in advance to the Financial Intelligence Unit in accordance with the Act on Reporting and Use of Specific Financial Transaction Information.
Notably, foreign crypto firms are required to register with South Korea’s FIU before operating in the country. If they fail to do so, they could be subjected to criminal punishment.
Crypto Registration Requirements: Key Features
Crypto companies need to register if they offer a Korean-language website, accept payments in won, or market to Korean users. Failure to follow this rule can result in up to five years in prison or a fine of around 50 million won (about $36,000).
The FIU has already been targeting several unregistered platforms as it cracked down on 16 companies in 2022 and 6 companies in 2023 and also blocked domestic access to these platforms through their websites and apps.
FIU to Continue Its Crackdown on Unregistered Crypto Platforms
The FIU also emphasized that in future, it will continue to keep blocking access to the websites and mobile apps of overseas crypto platforms that are not registered, in order to eliminate the risks of money laundering and protect the users, while consulting with other relevant organisations.
This comes after Google play blocked several unregistered crypto apps on March 26 including KuCoin and MEXC. The FSC also shared a list of 22 unregistered platforms where 17 are already blocked on Google’s app store. This regulation is part of South Korea’s broader efforts to regulate and control the cryptocurrency market to ensure transparency and prevent illegal activities.
Last month, the regulator asked Google to block 17 crypto apps and reports suggest that it is also planning to block some exchange websites to protect users and ensure legal compliance. The sanctions were aimed at well-known overseas exchanges like KuCoin, CoinW, Bitunix and KCEX. The platforms were reportedly running Korean-language websites and actively marketing to Korean users without registering as required.
South Korea to Upgrade its Crypto Task Force
Besides, South Korea has also proposed plans to upgrade its crypto task force into a permanent unit. This follows several high-profile scandals including a public official who was using disaster relief funds to trade crypto and a fake mining site in Gwangju that was actually running illegal gambling.
The FSC has also warned users that using unregistered platforms is risky. Currently, only 28 crypto companies are officially registered in the country.
South Korea has asked Apple to block 14 crypto exchange apps from its App Store and has blocked domestic access to apps like KuCoin and MEXC since April 11.
Failure to comply can lead to severe penalties, including up to five years in prison or a fine of around 50 million won (about $36,000).
