From CryptoPotato · By Chayanika Deka
South Korea is expanding its crackdown on unregistered exchanges. Financial authorities have ordered blocks on 27 overseas cryptocurrency exchange websites operating without registration in the country. The list includes major platforms such as KuCoin, MEXC, BingX, Phemex, XT.com, Bitrue, CoinW, Poloniex, BTCC, and BitMart.
The decision comes after two reviews held on October 6 and 7 by the Korea Communications Standards Commission.
New Restrictions
The Financial Intelligence Unit (FIU) announced the move on October 13. Authorities had already restricted downloads and updates of their apps on Google Play and Apple’s App Store. Now, they are extending those restrictions to the exchanges’ websites.
The enforcement approach is also becoming stricter.
Crypto exchanges that want to serve users in South Korea must meet local requirements, which include obtaining Information Security Management System (ISMS) certification and filing a report with the FIU. Overseas platforms are also covered if they target Korean customers. This can include operating Korean-language websites, marketing services to local users, or supporting payments in Korean won. Companies that operate without the required registration can face up to five years in prison or fines of up to 50 million won (over $37,000).
The FIU has so far referred 44 unregistered virtual asset service providers to investigative authorities. Measures to limit transactions between registered domestic exchanges and unregistered operators were also introduced. Purchases of virtual assets from these platforms using credit cards have been restricted as well.
The FIU plans to keep monitoring alternative domains used by affected exchanges to bypass the restrictions. Additional website blocks could follow if these platforms continue operating through new addresses. For existing users who need to withdraw their funds, authorities said guidance on withdrawal methods and procedures will be provided through the Digital Asset Exchange Association (DAXA).
Balancing Crackdown With Crypto Growth
The country has also taken a tougher stance on crypto-related misconduct. In February, a Seoul court sentenced crypto asset management firm CEO Jong-hwan Lee to three years in prison for manipulating token prices and making around 7.1 billion won ($5 million) in illegal profits. The ruling was the first case under the Virtual Asset User Protection Act. Lee was also fined 500 million won.
Crypto-related betting has also come under scrutiny. In September, police opened cases against 26 South Korean users of the prediction market Polymarket over bets worth around 17.6 billion won.18 of them were referred to prosecutors. Investigators used public blockchain records to trace the users. Police argued the bets may qualify as illegal gambling.