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South Korean authorities are now taking steps to weed out unregistered crypto exchanges that are still operating in the country. The Korea Financial Intelligence Unit (FIU) has set its sights on 16 Virtual Asset Service Providers (VASPs) and plans to take measures against these firms such as blocking their websites.
The FIU announced on August 18 that it has notified its investigative authority about the illegal business of 16 unregistered Virtual Asset Service Providers (VASPs), according to a blog post on the Financial Services Commission FSC) website. The regulator also warned crypto users to exercise caution when dealing with unregistered exchanges and platforms as it could potentially lead to damages and losses.
“The KoFIU has notified the investigative authority about the violation of unregistered business activities of 16 foreign-based VASPs carrying out business activities intended for domestic consumers pursuant to the Act on Reporting and Using Specified Financial Transaction Information,” the regulator wrote. The 16 foreign-based firms are KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.
According to the FIU, the 16 crypto firms were engaged in business activities targeting Korean consumers by maintaining Korean-language websites, launching promotional events that targeted locals, and supporting the purchase of virtual assets using credit cards as a payment option.
The FIU already notified foreign-based VASPs targeting Korean consumers in July this year reminding them of their obligation to register their businesses as mandated by the Act. However, the 16 firms continued to offer their services to Korean users without registering with the authority.
Because of the violation, the FIU plans to take measures and has already requested the Korea Communications Commission and the Korea Communications Standards Commission to block domestic access to the websites maintained by the unregistered crypto companies. The authority also directed credit card issuers to block card-based crypto purchases and payment services offered by the firms.
The authority will notify the respective FIUs in the home countries of the 16 VASPs about their violations in South Korea. “For illegal business activities of unregistered entities, maximum 5 years of imprisonment or up to KRW50 million of fine can be imposed with a restriction for registering as a VASP in domestic market for certain period of time,” the Korea FIU pointed out.
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