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South Korea Cracks Down on Crypto Sales by Non-Profits and Exchanges

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Key Takeaways:

  • Starting June 2025, South Korean non-profits may legally sell donated cryptocurrencies under strict internal and regulatory controls.
  • Virtual asset exchanges can liquidate crypto-based user fees, subject to new oversight rules to curb market impact and money laundering.
  • Updated transaction support standards aim to stabilize trading conditions and mitigate risks from speculative or illiquid crypto tokens.

In a major leap towards market formalization for digital assets, the South Korean Financial Services Commission (FSC) has finalized the detailed operating guidelines for the sales of cryptocurrencies by exchanges and non-profit entities from June 2025.

In its fourth Virtual Asset Committee meeting, these steps mark the government’s strategic goal of mainstreaming virtual assets into the formal oversight framework. The new framework permits qualifying NGOs to monetize digital assets gained through donations.

The qualifying institutions need to be under external audit oversight with an operational history for at least five years. Additional measures involve the setup of an in-house Donation Review Committee for advance approval on the legitimacy and monetization strategy for the donations.

All sales would be restricted to tokens that are currently traded on three or more local KRW exchanges, with an imperative for the coins to be cashed out into fiat in real-time. Overlapping Know Your Customer (KYC) and Anti-Money Laundering (AML) screening will be mandatory among banks, exchanges, and recipient organizations in order to prevent financial abuse.

Crypto exchange liquidations allowed with oversight.

Virtual asset exchanges will be able to convert user fees in cryptocurrencies into fiat for operational efficiency, but the policy sets clear limits in order to prevent conflict of interest and market disruption.

Only registered virtual asset business operators under South Korea’s Special Financial Transactions Act may engage in such activity. Furthermore, sales are confined to the top 20 cryptocurrencies by market capitalization across five KRW exchanges.

Daily sale volumes are capped at 10% of the intended liquidation amount, and transactions must occur outside of the exchange’s own platform to reduce price manipulation risks.

Further requirements for disclosure include board-level approvals and extensive pre- and post-disclosures in regard to sales operations and the use of funds. Such actions represent an increasing focus on compliance and accountability in digital asset operations.

Stricter Listing Protocols Target Market Volatility and Speculation

Alongside asset sale policies, the FSC unveiled revised transaction support best practices aimed at curbing instability triggered by listings of speculative or low-volume tokens. As a reaction to the recent increase in “listing beam” events, leading to extreme price fluctuations after listing, new procedures will mandate minimum circulation requirements and short-term market order limitations after the commencement of trading.

Assets flagged as “zombie coins” or “meme coins” with low trading volume or obscure utility will become subject to tighter listing standards, such as minimum user interactions and historical trading activity on trusted global exchanges. The changes reaffirm the FSC’s commitment towards building a safer, more mature trading market.

By June 2025, the FSC intends to put its standards into practice, with other legislation for token securities and company digital asset accounts following later in the year, marking a solid regulatory outlook for the country’s budding crypto market.

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South Korea Sees $40.6B in Crypto Outflows as Stablecoins Lead the Way

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  • South Korea saw $40.6 billion in crypto outflows in Q1, with stablecoins making up 47.3% of the total.
  • Stablecoins like Tether and USD Coin led South Korea’s $40.6B crypto outflows to international exchanges.
  • Despite the rising adoption, March saw a slight dip in stablecoin outflows as global crypto markets cooled.

South Korea suffered substantial cryptocurrency outflows in Q1, with approximately 57 trillion won (almost $40.6 billion) leaving the country. Almost half of these outflows, or a sizable fraction of them, comprised stablecoins, which indicated a further trend of users that were shifting their funds to offshore crypto exchanges. According to the data provided by Democratic Party member and lawmaker Min Byung-duk, the Financial Supervisory Service said stablecoins such as Tether (USDT) and USD Coin (USDC) accounted for 47.3% of the total outflow.

South Korea’s Crypto Outflows in Q1

During the period of January to March, 56.8 trillion won of cryptocurrencies were moved from South Korea’s five big digital asset exchanges (Upbit, Bithumb, Coinone, Cobbit, Gopax) to the global markets. Of the total, 26.87 trillion won of this money was in the stablecoins, which is a testament to the increasing role such an asset plays in worldwide cryptocurrency trades. 

Stablecoins are frequently utilized on international platforms such as Binance and Bybit for trading as well as buying digital assets. This makes stablecoins an ideal option to conduct international transfers.

While the report indicated a trend toward stablecoin transfers, a minor decline of the process was recorded in March. With the global market going cold and trading volume on foreign exchanges plummeting, the outflows were reduced. This change emphasizes the influence that broader market conditions exert on the way users act, with traders adapting to market volatility more and more.

Rising Crypto Adoption in South Korea

South Korea is still experiencing enhanced adoption of the digital assets. In February 2024, there were 16.29 million South Koreans with digital assets accounts (around 32% of the entire population in the country). Parallels are drawn to a rising level of mainstream engagement with digital assets, while both retail and institutional investors are interested. The figures are reflective of the user accounts from South Korea’s leading exchanges and reflect uniform growth in the sector.

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The popularity of digital adoption is not confined to being practiced by private individuals; digital assets are also being made increasingly involved by public officials. Only 411 out of 2,047 public officials who filed asset declarations that year claimed that they held cryptocurrency-related assets. These officials enjoy high posts such as: the secretary general of the Labor-Management Development Foundation, president of the Korean National Police University, and vice-president of the Korea Water Resources Corporation.

Read More: Toncoin (TON) at a Crossroad: Will $2.50 Support Trigger the Next Big Move?

South Korea to Allow Crypto Sales by Nonprofits and Exchanges From June 1

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  • South Korea permits nonprofits and exchanges to sell crypto legally starting June 1.
  • To curb volatility, the FSC restricts crypto sales to the top 20 coins by market cap.
  • Nonprofits must pass audits and form review committees to sell donated digital assets.

South Korea has announced new regulations allowing nonprofit organizations and cryptocurrency exchanges to sell digital assets legally starting June 1, 2025. The Financial Services Commission (FSC) introduced this decision during a meeting of its virtual asset committee on May. 

The implemented rules boost market transparency functions and anti-money laundering capabilities while supporting responsible market behavior.

Key Guidelines for Nonprofits and Crypto Exchanges

Nonprofit organizations can now sell cryptocurrency donations if they fulfill outlined requirements. Existing nonprofit organizations need to have five years of operation and pass an external audit. To maintain responsible digital asset management, the donation and sale process needs oversight by a “Donation Review Committee.” 

The regulations allow sales of cryptocurrencies listed on at least three Korean exchanges, like Bitcoin and Ethereum. Under the regulations, all platforms must refrain from permitting trades involving “zombie coins” or meme tokens.

The top 20 digital assets based on market capitalization will be the only currencies cryptocurrency exchanges can sell to generate operational funding. The Exchanges must adhere to restrictions, such as a daily sales cap of 10% of the planned volume. In addition, exchanges must obtain board approval of their sales plans while being required to publish reports on the proceeds.

Measures to Curb Market Manipulation and Speculation

The new guidelines address speculative practices and market manipulation, particularly concerning “zombie coins” and meme coins. Exchanges are now required to suspend trading support for tokens with low liquidity or market capitalization, such as those with an average daily turnover below 1% or a global market cap under 4 billion won ($2.79 million) for over 30 consecutive days. The measures also include temporary restrictions on market orders for newly listed tokens during initial trading periods to prevent speculative surges.

The FSC implemented these rules intending to stop price manipulation while preventing market disturbances that protect institutional investors and retail traders in their trading environment. Customer verification protocols launched by the FSC are scheduled for implementation in May to strengthen anti-money laundering actions.

South Korea’s Crypto Regulatory Shift

The regulatory change emerges as South Korea faces market turbulence and increasing concern about unregulated cryptocurrency trading practices in its market. The new rules establish a restricted structure supervising digital assets to diminish speculative trading dangers and fraudulent conduct. These new regulatory standards in South Korean cryptocurrency markets could establish an approach for other countries considering similar measures.

According to the FSC, upcoming planned changes include stablecoin regulatory frameworks and proposed guidelines for Bitcoin spot ETFs. Moreover, the developments hint at South Korea’s commitment to becoming a leading center for the sustainable cryptocurrency industry investment.

Related Reading | KuCoin Plans Return to South Korea After Regulatory Compliance Success

KuCoin Plans Return to South Korea After Regulatory Compliance Success

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  • KuCoin eyes a return to South Korea after securing regulatory compliance in major global markets.
  • Talks with South Korean regulators have commenced despite a prior forced exit.
  • Regulatory challenges persist globally, slowing down operations even for licensed exchanges.

Cryptocurrency exchange KuCoin has revealed that it is considering returning to South Korea after its previous exit due to regulations ordered by local regulators. 

The return is announced as the company focuses on compliance with key jurisdictions such as the United States, the European Union, China, and India.

KuCoin’s Chief Executive Officer, BC Wong, said that the firm’s plans while attending the Token2049 event in Dubai, noting that re-entry into South Korea will occur after all regulatory commitments in these key markets are met.

In the earlier part of the year, KuCoin encountered regulatory obstacles after South Korea’s Financial Services Commission ordered tech behemoths Google and Apple to limit access to crypto platforms that failed to register with the government.

The move effectively excluded KuCoin and some other exchanges from serving South Korean customers by blocking app installations and updates. 

Nevertheless, Wong expressed hope, citing that KuCoin has already started contacting South Korean regulators to investigate avenues for possible compliance and market return.

KuCoin Navigates Europe’s Evolving Crypto Regulations

BC Wong compared efforts in cryptocurrency compliance with traditional finance, with the argument that keeping a clean record across jurisdictions is crucial to ensure long-term growth. 

He noted that the differences in regulatory environments presented challenges, alluding to the suspected protectionism on the part of some national regulators. 

Wong proposed that some regulation could be designed to give domestic exchanges the edge by curbing foreign competition, and it introduces additional complexity to platforms such as KuCoin.

Simultaneously, Oliver Stauber, chief executive officer of KuCoin in the European Union, spoke about the prevailing challenges in Europe in spite of the adoption of the Markets in Crypto-Assets (MiCA) framework. 

According to Stauber, discrepancies in the interpretation of regulations by national officials may stall operations even among compliant companies. 

He noted that though MiCA is meant to ensure there is a harmonized environment across the regulations, national governments sometimes reject licenses previously issued according to previous guidelines, adding to the disruption in operations.

Virtual Asset Providers Face Strict Registration Rules

South Korea’s regulations are still strict under the Specified Financial Information Act, in which all virtual asset service providers are required to register domestically prior to providing South Korean customers with services. 

The Financial Intelligence Unit is still monitoring sanctions against unregistered overseas operators. Authorities verified in late March that the blocking of 17 unregistered exchanges, such as KuCoin, from significant app marketplaces has taken place.

Although KuCoin is still not available in South Korea today, the company’s active approach in engaging with regulators and prioritizing compliance in its strategy reflects a measured path toward future readmission.

Related Reading | Ethereum’s Monthly Chart Flashes Doji—Indecision Before the Storm?

South Korea’s PPP Pushes for Crypto ETF Approvals, Vows to Repeal Key Banking Rule

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  • PPP vows to approve spot crypto ETFs, scrap restrictive banking rule
  • Corporate crypto trading and stablecoin regulation set for overhaul
  • Election outcome could determine fate of PPP’s crypto reforms

The People Power Party (PPP) of South Korea has proposed major crypto sector reforms that seek to approve spot crypto exchange-traded funds (ETFs) and eliminate banking rule restrictions. The party intends to allow corporate crypto trading and stablecoin regulation to strengthen South Korea’s position in the global digital asset market. The outcome of the June 3 presidential election will shape the future of the proposed reforms.

The PPP’s reform seeks to provide banking access for crypto exchanges and approve spot crypto ETFs. The party intends to eliminate the “one exchange, one bank” rule, which restricts crypto exchanges to one bank.

Many have criticized the rule , which seeks to curb money laundering, because it limits competition and consumer options. The PPP believes that the termination of this restriction will provide crypto exchanges with multiple banking partners to create a competitive market.

South Korea Eyes Crypto ETF Reforms

The PPP also seeks to approve the trading of spot crypto ETFs in 2025. Spot Bitcoin ETFs have seen substantial interest and huge trading volumes. The PPP believes the crypto ETF approval aligns South Korea with global trends such as the U.S. Securities and Exchange Commission’s (SEC) approval of Bitcoin ETFs in January 2024.

The PPP seeks to establish a complete stablecoin regulatory framework. The party plans to establish a global standard for stablecoin regulation to enable international compliance. This approach ensures clear regulations and promotes stability and innovation in the stablecoin market.

The PPP plans to introduce corporate participation in the crypto market. The proposal allows non-profits and about 3,500 corporations to trade crypto from Q2 2025. The move aims to boost crypto adoption and attract more institutional investors who previously faced challenges due to the banking rule.

South Korea’s  Virtual Asset Special Committee

Furthermore, the PPP has announced plans to create a Virtual Asset Special Committee, which will operate under the presidential office. This committee would ensure the implementation of the party’s crypto reforms.

Moreover, the PPP seeks to pass the Framework Act on the Promotion of Digital Assets, which regulates crypto exchange operations as well as creates a standard for listing and disclosure of digital asset transactions.

However, the implementation and success of the PPP’s reforms depend on the outcome of the June election. The party faces competition from opposition leader Lee Jae-myung, who holds substantial voting power in the polls.

Greed and Deceit Land South Korean in Prison After $2M Crypto Scam

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  • The 2nd Criminal Division of the Changwon District Court in Gyeongnam Province sentenced a man to 3 years in prison for fraud.
  • The crypto scam involved embezzling approximately 2.93 billion won (around $2.04 million).
  • Court cited the use of a “round-robin” scheme and noted that only partial restitution was made, justifying the custodial sentence.

The war on crypto investors continues as few individuals were recently caught in a crypto scam web. A man in his 30s from South Korea has been convicted for 3 years by the 2nd Criminal Division of the Changwon District Court in Gyeongnam Province for defrauding a cryptocurrency investor out of 2.93 billion won, roughly equivalent to $2.04 million.

Convicted Fraudster Lures Crypto Victim With Promising High Returns

According to the latest report shared by Kookje, the 30-year-old South Korean referred to as “Mr. A” was brought to trial by the victim referred to as “Mr. B” on the allegations of fraud. Mr. A and Mr. B are said to have met in an open chatroom, where Mr. A pretended to be a wealthy investor. He lured the victim by promising an annual return of 30–50% along with the repayment of the principal. 

During the court hearing, Mr. A is said to have collected 2.93 billion won, numbering up to 324 transactions dating back to December 21, 2021. Additional transfers of 5 million won from Mr. B were recorded between December and August 19, 2023. 

Greed and Deceit Land South Korean in Prison After 2M Crypto Sc

However, in reality, Mr. A did not possess any assets or employment and was already suffering a loss worth millions of won from his previous crypto investments. 

Mr. A was found to have built trust with Mr. B by repaying part of the funds he had received under the guise of interest, thereby encouraging a broader fraudulent scheme.

The ruling judge who presided over the case, Judge Kim Seong-hwan, noted that although the defendant returned a portion of the stolen amount, this did not make up for the full restitution due to the deceptive “round-robin” structure of the fraud. 

The court also considered that the actual financial gain was remarkably lower than the total nominal amount listed in the indictment when determining the sentence.

Crypto Gate Opens? South Korea Signals Global Access Shift

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  • South Korea plans to open its crypto market to foreign investors under strict anti-money laundering conditions.
  • The Financial Services Commission is considering regulatory changes to support international participation in local exchanges.
  • Current restrictions, including KYC requirements and capital controls, may be eased for exchanges that meet AML standards.

South Korea has developed strict anti-money laundering regulations to allow foreign investors participate in its crypto market. Government financial bodies plan to change existing guidelines so international traders can access a safer and accessible system. The country moves forward to allow foreign market participation because it seeks international expansion of its crypto ecosystem while maintaining regulatory standards.

The Financial Services Commission (FSC) is now preparing amendments to lift current restrictions that penalize foreign investors in the market. The National Assembly seminar focused on how to synchronize AML requirements with foreign business participation. The government has strict requirements for overseas entry that prevent foreign investment in cryptocurrency exchanges.

The regulatory requirements enforce comprehensive know-your-customer (KYC) checks, restricting international trading at South Korean platforms. Most international investors encounter obstacles when they attempt to trade crypto through South Korean platforms. The forward implementation of regulatory standards indicates that restrictions aimed at compliant exchanges might be eliminated shortly.

South Korea Considers New Crypto AML Standards

South Korea‘s financial regulators are evaluating new anti-money laundering (AML) compliance standards that trading platforms must follow. The Financial Intelligence Unit (FIU) conducted its inspection protocol review and strengthening session on March 5th, 2025. MLC compliance criteria have been established by regulators as the only standard that enables exchanges to register international platform users.

The government restricts capital account operations, which stops foreign funds from freely entering the crypto market. The authorities are conducting assessments to determine potential ways to lift the restrictions on crypto portfolio investments for trading operations. AML guidelines followed by exchanges will grant permission to allow wider foreign user participation.

The FSC has designed monitoring systems that follow international standards to track closely all international money movement flows. The plans will serve dual purposes by combating unauthorized transfers and stopping market manipulation. The regulatory framework emphasizes developing protection methods that maintain market growth security for investors.

Altcoins Like Solana and Chainlink Could Benefit from New Access

Market openness in South Korea creates new opportunities for increased demand for alternative coins, Solana (SOL) and Chainlink (LINK). These tokens will receive increased liquidation potential in Asia’s developing trading environment because of the opening up of Korean exchanges to foreign traders. Local platforms and assets will experience enhanced benefits from this market shift.

The outcome of regulatory clearances could lead major Korean trading exchanges to establish international trading pairs between LINK and SOL. The initiative would expand its international customer base and position South Korea as an essential regional hub for crypto trading. Altcoins benefit from extensive cross-border usage because they attract interest from institutional traders at financial institutions.

Mature exchanges ready for compliance duties tend to welcome new token listings that contain products for international investors and rising altcoin portfolios. South Korea can improve its reputation as a compliant cryptocurrency gateway by providing easier access to SOL and LINK tokens for international institutions. The adopted policy direction demonstrates simultaneous strategic growth objectives, and it maintains strict enforcement procedures.

South Korea Enforces New Crypto Compliance Measures

South Korean government authorities have intensified their monitoring of unregistered crypto exchanges that break national laws. The government demanded Google restrict access to 17 unregistered platforms that did not follow South Korean standards. This regulatory action included some of the global exchanges that operated without AML compliance in South Korea.

The official request triggered Google to ban users from accessing those sites throughout South Korea. The market security measures underline South Korea’s dedication to enforcing proper market compliance. The regulatory bodies maintain their enforcement of non-compliant actors through continuous actions while promoting security-focused industry expansion.

South Korea pursues these decisions as part of its national crypto crime reduction and fund protection strategy. The region will enforce new registration protocols for business operations and support authentic exchanges. The policies bring together innovation support with financial integrity protection for the nation.

South Korean Regulator Cracks Down on Unregistered Foreign Crypto Platforms

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  • South Korea’s FIU and FSC have blocked 17 unregistered cryptocurrency exchanges, including KuCoin, Poloniex, and MEXC, from Google Play to prevent money laundering and protect local investors within the country.
  • Authorities are working with Apple Korea and the KCSC to also restrict access to these crypto platforms via the internet and the App Store.

South Korean regulators have blocked 17 unregistered cryptocurrency exchanges, including Poloniex, KuCoin, and MEXC, from Google Play. That is, South Korean residents no longer have access to some crypto exchanges, they have urged users to withdraw their funds. This is part of the Country’s efforts to stop money laundering and protect citizens from possible crypto losses.

The government hopes this action will reduce financial risks and ensure better oversight of digital trading platforms.

March 26, South Korea’s Financial Intelligence Unit (FIU) announced that Google had already blocked about 17 unregistered cryptocurrency exchange apps. This action restricts users within the nation’s the access to downloading or updating the apps. 

Earlier on March 21, the FIU mentioned that there is a high probability of sanctions against all cryptocurrency platforms that have failed to register under the country’s financial laws. The agency warned that running an unregistered and unregulated exchange could lead to serious penalties, like; five years in jail or fines that could reach 50 million (around $34,150).

The South Korean Authorities require virtual asset service providers (VASPs) to report their operations to regulators. The FIU worked with the Korea Communications Standards Commission (KCSC) to explore ways to come about  restricting the access of these platforms. By March 26, the Financial Services Commission (FSC) released a list of 22 unregistered crypto exchanges, with 17 already removed from Google Play, limiting new installations and any kind of updates.

South Korea Blocks 17 Crypto Exchanges

The FSC announced that 17 unregistered exchanges are now restricted on Google Play, so no new users can install the apps. Existing users will also be unable to receive new updates. Some of the affected exchange platforms include; KuCoin, MEXC, Phemex, XT.com, Biture, CoinW, CoinEX, ZoomEX, Poloniex, BTCC, DigiFinex, Pionex, Blofin, Apex Pro, CoinCatch, WEEX, and BitMart. 

Officials believe this action will help reduce money laundering and protect local investors from any form of losses. The FIU is also working with Apple Korea and the KCSC to block access through the internet and the App Store.

Related Reading |  Bitcoin at $85K: Long-Term Holders Gain Strength as Weak Hands Exit

Google Blocks 17 Crypto Apps in South Korea Amid FIU Crackdown

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  • South Korea’s FIU has successfully pushed Google to block 17 unregistered crypto apps on Google Play.
  • The restriction took effect on March 25, 2025, preventing new installations and updates of the apps.
  • The action targets foreign exchanges like KuCoin, MEXC, and others operating without local registration.

South Korea’s Financial Intelligence Unit (FIU) has enforced new restrictions on 17 foreign crypto exchanges through Google Play. After pressure from the FIU, Google has blocked access to the unregistered platforms for domestic users. The action took effect on March 25, 2025, effectively preventing any installations and updates of specific apps.

This is due to violations of the Specific Financial Transaction Information Reporting and Use Act. Under the law, all foreign virtual asset service providers (VASPs) are required to register before operating in South Korea. Buying and selling cryptocurrencies in an exchange that does not comply can result in fines and even criminal penalties.

The FIU confirmed that it also affected exchanges, such as KuCoin, MEXC, Bitunix, and others targeted at South Korean users. However, these platforms could not fulfill their fundamental criteria, such as service support in the Korean won or Korean language. Therefore, regulators decided those companies were acting illegally on the domestic market.

South Korea Expands Crypto Exchange Crackdown

S. Korea’s favorite exchange, KuCoin, was caught on the FIU’s restricted list. Consequently, the price of a token native of it KuCoin Token (KCS) fell down by 0.3% within 24 hours. As a result of investor uncertainty in reaction to access blocked on the platform, the price movement is still.

The FIU said KuCoin has continually encouraged South Korean residents to use its services without meeting registration requirements. Because of non-compliance, the exchange will be inaccessible through Google Play for new users. It will also prevent current users from getting updates to the app, thereby reducing its functionality.

As a result, authorities are working with cybersecurity agencies to monitor unauthorized access and foil any financial transactions with unregistered exchanges. These measures include blocking related websites and freezing financial flows through local banks. The government has also encouraged users to remove funds from unregistered operating sites as soon as possible.

MEXC and Others Under Investigation for Unlicensed Operations

Currently, South Korean regulators are reviewing MEXC and several other platforms, including BitMEX, CoinW, and KCEX. It is alleged that these exchanges have targeted investors in the region without the proper licensing, and an official investigation from the FIU has taken place. It was found that these platforms did not build the required local presence.

The block of Google Play does not affect the existing downloads, but the wider crackdown will soon be extended to the other app stores and also platforms. Apple Korea and local internet providers are now working with the FIU to enforce a larger ban. They are also being investigated for their transactions with these platforms through financial institutions.

The idea is to limit the market access of unregistered providers and protect investors through this multi-agency approach. This is in line with a move to increase supervision of the crypto sector. Domestic crypto participation is on the rise, making enforcement of such restrictions timely and important.

The FIU released a list of the registered exchanges and asked users to immediately get rid of the non-compliant ones. But this follows the national strategy to form a transparent and lawful crypto market. This situation marks the rise of South Korea’s crypto adoption and the need for proper regulation.

On the other hand, prosecutors are investigating domestic exchange Bithumb for financial misconduct related to its former CEO, Kim Dae-sik. During the probe into misuse of company funds, authorities raided Bithumb’s headquarters. This case, while different, puts pressure on the wide crypto field to guarantee properness.

South Korea Cracks Down on Non-Compliant Crypto Platforms, Including BitMEX and KuCoin

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  • South Korea targets crypto exchanges like KuCoin for failing to comply with VASP rules.
  • Unregistered platforms like BitMEX face sanctions in South Korea to protect investors.
  • South Korea plans to block illegal crypto exchanges operating without proper registration.

Multiple cryptocurrency exchanges will face financial sanctions because they operate against South Korean laws. The Financial Intelligence Unit (FIU) now considers unregistered Virtual Asset Service Providers (VASPs) targets for law enforcement action. The country has taken this action as part of a campaign to regulate the booming crypto market and safeguard investors from potential threats.

Exchanges under Scrutiny for Non-Compliance

The FIU discovered multiple unregistered crypto exchanges that continue to provide services to the countries investors. Multiple virtual currency trading platforms operate Korean-language websites but they do not comply with the countries regulatory requirements to report their activities thus violating the nation’s stringent financial regulations. The Specified Financial Information Act dictates that FIU registration remains mandatory for all platforms that offer virtual asset exchange services and custody or brokerage functions or management capabilities.

The official at FIU stated their organization is studying what potential sanctions would apply to these cryptocurrency exchanges. The Korea Communications Standards Commission (KCSC) is undergoing consultations with the officials to find blocking methods for these platforms. Additionally, South Korean authorities have demonstrated their commitment to enforcing national regulatory rules because they want to protect home investors and stabilize market conditions.

KuCoin and Other Platforms Respond to Allegations

KuCoin stands out as one of the exchange platforms undergoing investigation. Representatives of the platform stated their dedication to following both global regulatory standards and the laws of the country. A representative from the company has stated that they actively track regulatory changes across all jurisdictions. The future outlook for KuCoin and other platforms to satisfy the countries regulatory requirements remains uncertain.

South Korean authorities continue to enforce regulatory standards against exchanges by investigating administrative and criminal penalties for entities that fail to meet compliance standards. The blocking of platform access by the countries authorities poses risks to users who trade crypto as it will could constrain their ability to access these services.

Wider Context of South Korea’s Crypto Oversight

The South Korean government maintains crypto sector regulation as one of its main strategic goals. It has put in place strict protocols that both boost transparency and protect against monetary illicit transactions while combating schemes of fraud. The countries restrictive measures intend to shield cryptocurrency investors against market volatility fluctuations and risks.

Apart from the regulation of foreign cryptocurrency exchanges, South Korean local platforms now face enhanced oversight. The South Korean prosecution team searched Bithumb’s headquarters after discovering financial misconduct connected to the exchange’s previous CEO. All digital cryptocurrency exchanges in the country face greater supervision through these investigations that demonstrate South Korea’s intensified financial sector compliance and integrity efforts.