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Google has enforced domestic access restrictions on 17 cryptocurrency exchanges not registered in South Korea following a request from the South Korean government. Since Tuesday, users in the country have not been able to install or update apps related to these exchanges, which include platforms like KuCoin, MEXC, Phemex, and Poloniex.
According to the South Korean financial regulator, the Financial Services Commission (FSC), these trades violated the Special Financial Transactions Act. The Act mandates that all virtual asset operators performing business in South Korea register with authorities.
Under Article 7 of the law, any exchange offering services in the country, even if based abroad, must comply with the registration requirements. Regulators use several criteria to determine if an overseas exchange is operating domestically legally, including whether it provides services in Korean, promotes events targeting local users, or supports transactions in the Korean won.
Crypto exchanges have violated laws since 2022, FIU says
In the past 3 years, South Korea’s Financial Intelligence Unit (FIU) has reportedly identified and cracked down on unregistered foreign exchanges. In 2022, the agency identified 16 such operators, followed by six more in 2023.
Registered exchanges have been ordered not to engage in transactions with unregistered counterparts. Those caught conducting business without proper registration could face severe penalties, including up to five years in prison or fines reaching 50 million Korean won (approximately $37,000).
The government announced that its request for Google to suspend the operations of trading platform apps is aimed at curbing illegal activities. This includes money laundering, while also safeguarding domestic users against threats such as hacking, fraud, and data breaches.
The FIU is now working with additional regulatory bodies, including Apple Korea and the Korea Communications Standards Commission, to introduce similar measures for apps available on the Apple App Store and crypto-related websites.
Its website also has an up-to-date list of registered virtual asset operators, which features 28 exchanges that are currently allowed to operate in South Korea.
Crypto projects accuse South Korean Exchanges of high listing fees
Elsewhere, exchanges operating in East Asian countries are allegedly asking for “too much” to list tokens on the country’s largest crypto platforms.
According to a report by Chinese blockchain journalist Colin Wu on March 20, at least two crypto projects allegedly paid substantial fees to secure listings on major exchanges. One project reportedly spent $10 million to list on Upbit, while another paid $2 million to be listed on Bithumb.
Some projects claimed that intermediary fees were charged as part of the process. Wu’s report states that certain projects had to allocate between 3% and 5% of their total token supply to secure a listing on Upbit.
However, not every project faced such costs; out of the seven projects Wu contacted, three stated they had not paid any intermediary fees.
According to reports, Upbit has denied the claims, saying that its listing process is based on merit and not on money deals. The exchange says that selling tokens doesn’t cost anything and that it doesn’t let outsiders help with the process.
In a public statement, the company called out those making the claims to disclose the names of any companies allegedly involved in such payments.
“If a specific company or individual demands intermediary fees while claiming to guarantee trading support from Upbit, please be advised that this is the act of illegal brokers unrelated to Upbit,” the exchange wrote.
Similar accusations were lodged against other major exchanges, including Binance and Coinbase. Both companies also disputed claims of charging direct listing fees, instead stating that any required payments are structured as security deposits intended to support project development.
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