South Korea is preparing to block access to Kucoin, CoinW, and exchanges that are not registered under the Special Financial Information Act to protect investors.
South Korea's financial regulatory agency is preparing to apply sanctions against many foreign cryptocurrency exchanges operating illegally in the domestic market without registering under the Special Financial Information Act. According to information from a senior official, measures to block access to these websites are being seriously considered.
According to sources from financial authorities on March 21, the Financial Intelligence Unit (FIU) of the Korean Financial Services Commission has recently identified several foreign exchanges providing services to Korean users without registering as Virtual Asset Service Providers (VASP). The FIU is currently investigating these exchanges and coordinating with relevant agencies to take appropriate action.
South Korea Tightens Cryptocurrency Market Regulation
The exchanges subject to sanctions include Kucoin, CoinW, Bitunix, and KCEX – platforms familiar to many Korean investors. These exchanges were found to be operating Korean-language websites, conducting marketing activities, and providing customer support targeting Korean users without complying with registration requirements.
According to current regulations of the Special Financial Information Act, entities wishing to provide brokerage, custody, or virtual asset management services in South Korea must officially register with the FIU and be approved. Failure to comply with this regulation will be considered an illegal business activity and face criminal penalties and administrative sanctions.
This is not the first time South Korean authorities have taken strong measures. In 2022, the FIU requested the Korean Communications Oversight Committee to block access to 16 unregistered foreign exchanges and collaborated with domestic credit card companies to prevent the use of credit cards for purchasing and paying for virtual assets through these platforms. As a result, many foreign exchanges withdrew from the Korean market and stopped accepting new registrations.
A FIU representative stated: "We are considering blocking access by coordinating with the Communications Oversight Committee for foreign exchanges that have not registered but are still providing services to domestic investors. We are compiling damage cases and related data to enhance communication between agencies, and expect specific measures to be implemented this year."
