Unregistered cryptocurrency exchanges operating in South Korea could see their services suspended as the Korean Financial Intelligence Unit (FIU) takes action against 16 foreign firms.
The FIU has notified its investigative authority that 16 virtual asset service providers did business without the necessary registrations. Major exchanges, including the likes of KuCoin, Poloniex and Phemex, were listed along with 13 other exchanges that are being suspended by the FIU.
All 16 exchanges allegedly engaged in business activities targeting domestic consumers by offering Korean-language websites, holding promotional events targeting Korean consumers and providing credit card payment options for cryptocurrency purchases. These activities all fall under the Financial Transactions Report an act.
The FIU has already taken action against the unregistered exchanges reporting the violation of registration obligations and intends to inform its counterparts in the respective countries that the businesses are operating. Unregistered entities face five years in prison, a fine of ~$37,000 and a possible ban on future registration in the country.
Related: South Korea’s small crypto exchanges face increasing regulatory heat
A request has also been submitted to the Korea Communications Commission and the Korea Communications Standards Commission to block domestic access to the websites of the relevant exchanges.
Credit card providers have been asked to identify and block cryptocurrency purchases made using credit cards. The FIU also issued a demand to registered exchanges in the country to suspend transactions of the 16 unregistered companies to curb transfers to other platforms.
South Korea’s Financial Services Commission has announced a deadline for local and foreign cryptocurrency-related businesses to register with the relevant authorities in July 2022. September 24 is the deadline for companies to register before they could face criminal charges. prosecution and the eventual fines and penalties previously mentioned.
While the FIU is targeting unregistered exchanges, the FSC has promised to speed up the review of 13 different bills related to cryptocurrencies being considered by the National Assembly. Efforts are being made to produce legislation that balanced access to blockchain development, investor protection and market stability.