South Korea Expands Crackdown on Unregistered Crypto Exchanges

South Korea is intensifying its efforts to regulate the cryptocurrency market. On April 11th, the Financial Services Commission (FSC) announced the blocking of 14 cryptocurrency exchange applications from the Apple App Store. KuCoin and MEXC were among the exchanges affected.

This action follows a similar move by Google Play on March 26th, which blocked access to several unregistered exchanges, including KuCoin and MEXC. The FSC's April 14th report stated that these exchanges were operating as unregistered overseas virtual asset operators. The Financial Information Analysis Institution (FIU) will continue blocking apps and websites of such operators to combat money laundering and protect users. The FSC previously published a list of 22 unregistered platforms, with 17 already blocked on Google Play.

The FSC's report clarifies that Apple App Store users will be unable to download the affected apps, and existing users will not receive updates. The FSC emphasizes that unregistered business activities are criminal offenses, punishable by up to five years imprisonment and a 50 million won ($35,200) fine.

Further Action Against Unregistered VASPs

On March 21st, Hankyung reported that the FIU and FSC were considering sanctions against unregistered cryptocurrency exchanges operating within South Korea. These sanctions included blocking access to their applications. South Korean law requires operators of cryptocurrency sales, brokerage, management, and storage to register with the FIU. Failure to comply results in penalties and sanctions.

This crackdown coincides with a surge in cryptocurrency adoption in South Korea. As of March 31st, over 16 million users – more than 30% of the population – were using cryptocurrency exchanges. Industry officials project this number could exceed 20 million by 2025. Furthermore, over 20% of South Korean public officials reportedly hold cryptocurrencies, totaling approximately $9.8 million as of March 27th, encompassing various assets like Bitcoin (BTC), Ether (ETH), XRP, and Dogecoin (DOGE).