Bloomberg has reported that the South Korean regulator, FSC (the Financial Services Commission), intends to scrutinize more than a dozen cryptocurrency exchanges from overseas that have been offering services in the country without a proper license.
The South Korean government FSC accused 16 cryptocurrency exchanges of breaking the law, including KuCoin MEXC Phemex XTcom Bitrue ZBcom Bitglobal CoinW CoinEX AAX ZoomEX Poloniex BTCEX BTCC DigiFinex Pionex.— Wu Blockchain (@WuBlockchain) August 18, 2022
16 foreign exchanges to be blocked
Sixteen foreign crypto exchanges in South Korea have been operating without a necessary permit, the FSC states, as was also shared on his Twitter blog by Chinese crypto journalist Colin Wu earlier today.
Among these platforms are Poloniex, Bitrue, CoinEX, KuCoin and others. The country's authorities now intend to block the access of investors and traders to these exchanges in Korea and may launch an investigation related to these companies.
Their unlicensed work will be reported to the countries of the companies' origin, and they will attempt to get them isolated from the crypto sector should these exchanges fail to receive the necessary permissions to operate in South Korea.
South Korea plans to block domestic access to foreign cryptocurrency exchanges that lack the proper registration to operate in the country and could launch a probe into the companies https://t.co/rhwHXt0ANB— Bloomberg Crypto (@crypto) August 18, 2022
According to local legislation, individuals or businesses that offer their paid services illegally may face five years of imprisonment or a fine that can reach as much as 50 million won (equal to $37,900).
Besides, these businesses may lose the chance to register their company for a certain period of time.
Obligatory certification for crypto exchanges
In 2021, South Korean government obliged crypto trading venues to get certified via the Information Security Management System.
After that, more than 50% of local crypto traders quit business in the country. At the moment, 35 platforms have legal permission to offer their services to customers. These include Bithumb, Upbit, Coinone and others.