South Korea is tightening its grip on the cryptocurrency market, targeting unregistered overseas exchanges that operate without approval. Financial regulators are stepping up enforcement to protect investors and prevent illicit activities in the digital asset space.
Regulators Take Action Against Foreign Exchanges
The Financial Intelligence Unit (FIU), under South Korea’s Financial Services Commission, is preparing sanctions against several international crypto exchanges that have been serving Korean users without proper registration.
Authorities are considering blocking access to these platforms, which include Bitmex, Kucoin, Coinw, Bitunix, and KCEX. These exchanges have been actively marketing to Korean investors, providing customer support in Korean, and running Korean-language websites—all without complying with local laws.
“These exchanges are clearly targeting Korean users while ignoring our regulations. This creates serious risks for investors and threatens the integrity of our financial system,” an FIU official stated.
The Specific Financial Information Act in Full Force
South Korea is enforcing its Specific Financial Information Act, which requires all crypto platforms operating in the country to register with the FIU. The law is designed to ensure greater transparency, prevent financial crimes, and safeguard local investors.
This isn’t the first time regulators have cracked down on unregistered exchanges. In 2022, the FIU successfully blocked 16 overseas platforms, working alongside the Korea Communications Standards Commission and domestic card companies to prevent credit card transactions with these exchanges. As a result, several platforms withdrew from the Korean market.
What’s Next?
With this latest crackdown, South Korean authorities are sending a clear message: foreign exchanges must play by the rules if they want access to Korean investors. If the FIU moves forward with site restrictions, unregistered platforms could face severe limitations or be completely blocked from the Korean market.
