South Korea’s Financial Services Commission (FSC) has reported 16 foreign cryptocurrency exchanges to investigative bodies for violating the Specific Financial Information Act, news1 report August 18th.
Although the law prohibits unregistered cryptocurrency exchanges from operating without a license, 16 companies offer cryptocurrency services to South Koreans and host events for South Koreans, according to the report. is doing.
Affected exchanges include MEXC, KuCoin, CoinW, CoinEX, ZB.com, Bitglobal, Bitrue, Poloniex, BTCEX, Phemex, XT.com, Pionex, BTCC, DigiFinex, AAX, and ZoomEX.
The report revealed that: This violation was discovered by the FSC’s Financial Information Analysis Institute division.
Regulators had notified companies of their obligations to report their operations, but they did not comply.
FSC wants blocks like KuCoin, Poloniex
The FSC wants to prevent the continued operation of these exchanges within its jurisdiction.
We have asked the Korea Communications Commission and the Korea Communications Commission to block domestic access to the website.
Meanwhile, regulators want to ban credit card companies from providing services to these companies.
Exchange does not have ISMS certificate
Officials explained that the exchange was poorly equipped as it did not have an Information Security Management System (ISMS) certificate. This means that users are at risk of exposing personal information.
Apart from that, the official added that malicious actors can also use exchanges to launder money.
Under this law, individuals operating unregistered and illegal exchanges can be sentenced to up to five years in prison or fined 50 million won ($37,900).
In addition, the operator will not be able to register as a domestic virtual asset operator for five years.
This law applies to both foreign and domestic exchanges operating domestically.
Korean crypto regulation
South Korea has one of the most comprehensive legal frameworks for the cryptocurrency industry.
In 2021, authorities will require cryptocurrency companies to obtain ISMS certification, resulting in the withdrawal of several cryptocurrency exchanges from the country.
However, 35 virtual asset providers can be registered locally. Five of these exchanges, UpBit, Coinone, Gopax, Korbit, and Bithumb, are responsible for over 99% of crypto transactions in the country.
Meanwhile, the recent collapse of the Terra ecosystem has placed more and more emphasis on domestic crypto regulation.
