South Korea escalates crackdown on unregistered cryptocurrency platforms, blocking access to KuCoin and MEXC apps. As the country works to regulate the crypto asset market, foreign firms must now adhere to stringent requirements to operate legally.
South Korea has decided to crack down on illegal activities related to cryptocurrencies by asking Apple to block 14 crypto exchanges, including those of KuCoin and MEXC. Since April 11, access to these platforms is now restricted for South Korean users.
This move is part of a broader regulatory framework for the cryptocurrency sector in the country. Foreign companies wishing to operate in South Korea must now register with the Financial Intelligence Unit (FIU). Failure to comply with this rule can result in heavy sanctions, including up to 5 years in prison or a fine of around $36,000.
Crypto companies must meet certain conditions to register in South Korea. They must provide a website in Korean, accept won payments, or explicitly target South Korean users. Failure to do so may lead to legal action.
The FIU has already sanctioned several unregistered platforms, blocking access to their websites and apps. It aims to continue these efforts in the future, in collaboration with other competent authorities, to eliminate money laundering risks and protect consumers.
In addition to these measures, South Korea also plans to transform its crypto task force into a permanent unit. This follows several scandals involving the sector, such as using emergency relief funds for crypto trading or a fake mining site in Gwangju.
The aim is to tighten control further over a rapidly expanding cryptocurrency market, ensuring transparency and legal compliance of activities. Currently, only 28 crypto companies are registered in South Korea, indicating that many players still need to align with regulations.
In conclusion, South Korea is sending a clear message to foreign companies in the cryptocurrency sector: the country intends to firmly regulate this emerging market. Companies wishing to operate within its borders must now adhere to strict requirements or face severe sanctions. This decision is part of an effort to secure individual investments and combat illegal activities.
Beyond the directly targeted entities, this incident highlights the importance for all stakeholders in the crypto sector to remain vigilant of local regulatory developments. Such an approach is essential to sustain the healthy and sustainable development of the cryptocurrency ecosystem.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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