South Korea Eyes KuCoin, BitMEX in Crypto Exchange Crackdown

South Korea is intensifying its crackdown on unregistered crypto exchanges operating within the country.

The Financial Intelligence Unit (FIU) of the Financial Services Commission is targeting exchanges like KuCoin, BitMEX, and a few more for allegedly providing services to Korean users without proper registration as virtual asset service providers (VASPs) under the Specific Financial Information Act.

South Korean law mandates that crypto exchanges register as VASPs to operate legally. These targeted exchanges have failed to comply with this requirement.

The FIU is considering blocking access to these exchanges as a primary enforcement measure. This involves consulting with the Korea Communications Standards Commission to implement website blocks.

Potential access restrictions could force Korean users to shift to locally registered exchanges, impacting their ability to manage assets on these platforms.

The crackdown could lead to reputational damage, loss of market share in South Korea, and pressure to either comply with regulations or exit the market.

South Korea has been strengthening its regulatory framework for crypto. This includes implementing anti-money laundering (AML) regulations.

The crackdown on unregistered exchanges is part of broader efforts to ensure compliance and protect users within the country's financial system.

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