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South Korean authorities are set to act against crypto platforms operating outside of their rules. As per local reports, the Financial Intelligence Unit (FIU) of the Financial Services Commission could impose sanctions on crypto exchanges operating without legal recognition.
The FIU will act against crypto platforms that failed to secure necessary licenses from the appropriate regulators. South Korea’s Specified Financial Information Act requires crypto exchanges to report as virtual asset service providers (VASPs). However, most exchanges in South Korea have failed to comply.
South Korea Targets Unlicensed Crypto Exchanges to Protect Local Investors
Some of the proposed measures against these exchanges include blocking access to their site. Such sanctions, according to regulators, would help protect South Korean users from using illegal platforms.
South Korea Cracks Down on Unregistered Crypto Exchanges!
Sanctions are planned against major platforms like BitMEX, KuCoin, CoinW, Bitunix, and KCEX.
What does this mean for the market?
𒈙𒈙𒈙𒈙𒈙𒈙𒈙𒈙$BTC $ETH $TON $SOL pic.twitter.com/HlfHo1MnmT
— DeFiMole (@DeFiMole_) March 22, 2025
Some of the exchanges targeted by the FIU include Coinw, Kucoin, Bitunix, KCEX, and Bitmex. Reports claim that these exchanges offer fully-fledged services to Korean users, courting local investors without securing the required license.
Commenting on the situation, an FIU spokesperson said, “These exchanges are targeting Korean users, offering localized services without complying with our regulations. This poses a significant risk to our investors and undermines the integrity of our financial system.”
“We are currently reviewing blocking access to unreported overseas exchanges that are providing services to domestic investors through consultation with the Korea Communications Standards Commission. We are organizing damage cases and related data to strengthen communication between authorities, and we expect to see tangible measures taken within this year,” the spokesperson added.
A KuCoin representative has confirmed that the exchange is observing regulatory developments in areas like South Korea, affirming the exchange’s plans for compliance.
The South Korean Financial Intelligence Unit is cracking down on some crypto exchanges.
As much as we may want to compare this to the regulation by prosecution that the US SEC was synonymous with before the Trump administration, I don’t think that would be fair.
South Korea has… https://t.co/D6y6tEhwyT
— King Crypto (@iam_kingcrypto) March 21, 2025
“We are closely monitoring regulatory developments across all jurisdictions, including Korea. At KuCoin, we believe that compliance is essential for the healthy and sustainable growth of the crypto industry—this has always been our stance and will continue to guide us as we move forward. We remain committed to supporting the industry’s long-term development through proactive and responsible practices,” the KuCoin rep remarked.
According to YTN，South Korean prosecutors today conducted a raid on the headquarters of the cryptocurrency exchange Bithumb, investigating allegations that the company misused funds to support the purchase of a personal apartment for its former CEO. The case was referred by the…
— Wu Blockchain (@WuBlockchain) March 20, 2025
South Korea Increases Crypto Monitoring
South Korea has also increased its scrutiny of crypto exchanges, monitoring activities such as money laundering and terrorism financing. Crypto exchange Bithumb recently came under the spotlight following claims that the company’s former CEO, Kim Dae-sik embezzled funds for personal use.
There have been other claims of corporate misconduct among crypto firms in South Korea. The FIU is exploring strong measures against such platforms.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
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