South Korea’s Top Financial Regulator Cracks Down on Unregistered Crypto Exchanges
Regulatory Clampdown Leads to Removal of 14 Apps from Apple’s App Store and 17 from Google Play
South Korea’s top financial regulator, the Financial Services Commission (FSC), has removed 14 crypto exchange apps from Apple’s App Store and 17 from Google Play as part of a crackdown on unregistered foreign operators. The FSC announced on Monday that the bans took effect on Google’s Play Store on March 25 and on Apple’s App Store on April 11.
Background
In South Korea, virtual asset service providers must register with the FSC’s Financial Intelligence Unit (FIU) before doing business domestically. Factors that trigger this requirement include having a Korean-language website, accepting payments in won, or marketing to Korean users. Violations can lead to up to five years in prison or fines of up to 50 million won (around $36,000).
Exchanges Targeted
The FSC targeted a list of unreported foreign virtual asset operators, including major platforms like KuCoin and MEXC. Two of the exchanges, Poloniex and BitMart, did not immediately respond to a request for comment.
FSC’s Warning
The FSC also issued a warning to users that dealing with unregistered platforms carries serious risks. Currently, 28 crypto businesses are officially registered in South Korea.
Regulatory Efforts
Regulators in South Korea are increasingly unwilling to tolerate offshore exchanges skirting alleged domestic oversight. The FSC previously took action against 16 exchanges in 2022 and six more in 2023.
Proposed Crypto Task Force Upgrade
In January, the country proposed plans to upgrade its crypto task force into a permanent investigative unit. If approved, the unit will build on its work against crypto-related crimes, expanding its authority and resources beyond its formation, established back in July 2023.
Recent Scandals
A series of high-profile scandals has also contributed to the FSC’s clampdown. A civil servant was accused of embezzling nearly 500 million won ($342,000) in public funds to trade crypto, some of which came from flood recovery donations. A former lawmaker was also recently cleared of charges after being accused of hiding crypto assets. And last week, a supposed crypto mining operation in Gwangju turned out to be a front for illegal gambling funneling over 140 million won ($95,000).
Conclusion
The FSC’s crackdown on unregistered crypto exchanges is a significant step towards regulating the crypto market in South Korea. The agency’s efforts aim to protect consumers and prevent fraud. As the crypto market continues to grow, regulatory bodies around the world will need to stay vigilant to ensure the integrity and security of the market.
FAQs
Q: What is the Financial Services Commission (FSC)?
A: The FSC is South Korea’s top financial regulator.
Q: Why did the FSC remove 14 apps from Apple’s App Store and 17 from Google Play?
A: The FSC removed the apps because they were operated by unregistered foreign virtual asset operators.
Q: What are the consequences of violating the FSC’s regulations?
A: Violations can lead to up to five years in prison or fines of up to 50 million won (around $36,000).
Q: How many crypto businesses are officially registered in South Korea?
A: Currently, 28 crypto businesses are officially registered in South Korea.
Q: What is the proposed crypto task force upgrade?
A: The proposed upgrade aims to create a permanent investigative unit to combat crypto-related crimes.
