Hold onto your crypto hats, folks! The South Korean crypto scene is about to get a shake-up as the Financial Intelligence Unit (FIU) tightens its grip on overseas exchanges that haven't quite played by the rules. Picture this: a crypto party where some guests forgot to RSVP, and now the host is not happy.
The buzz is that several big-name platforms like BitMEX, KuCoin, CoinW, Bitunix, and KCEX are in the hot seat. Why, you ask? They've been operating in South Korea without officially reporting as Virtual Asset Service Providers (VASPs), a crucial step under the country's Specific Financial Information Act.
Simply put, if you're dealing in crypto on Korean soil, you've got to let the FIU know. Miss that step, and you're looking at some serious consequences, possibly even criminal charges. Yikes!
Adding to the drama, these platforms have been wooing South Korean investors with Korean-language websites but without offering local customer support. It’s like offering a menu in a language you understand but not having anyone to take your order. The FIU's response? They're not just sitting back. Plans are in the works to block access to these unreported exchanges, in collaboration with the Korea Communications Standards Commission.
An FIU official hinted at some big moves, saying, “We're on it and expect to see action this year.” It's not the first time South Korea's financial watchdogs have cracked the whip. Back in September 2021, they told over 60 exchanges to pack up and leave if they couldn't meet local anti-money laundering (AML) standards. Only a few, like Upbit and Bithumb, got to keep their doors open.
Fast forward to 2022, and the FIU was at it again, blocking access to non-compliant platforms and teaming up with card companies to stop crypto transactions from these sites. As of this year, only 31 crypto firms are officially registered in South Korea, a drop from 42 in 2024. With this new crackdown, expect that number to dwindle even more.
So, if you're dabbling in crypto in South Korea, it might be time to double-check if your exchange is on the up and up. It seems the crypto landscape here is about to change, and you don't want to be caught out in the cold!
