Authorities in South Korea issued a note threatening global cryptocurrency exchanges operating in the country without records with fines and even imprisonment. In the list of exchanges mentioned in the note are major exchanges such as KuCoin, Phemex, Bitrue, CoinEX, Poloniex, and others. According to a note from the Korean Financial Intelligence Unit (KoFIU), unregistered companies can face up to five years in prison or fines of around R$200,000. “KoFIU announced on August 18 that it had notified the investigative authority of the illegal business activities of 16 unregistered Virtual Asset Service Providers (VASPs). KoFIU has cautioned users of virtual assets to exercise extra caution to avoid incurring damages that may result from their transactions with unregistered VASPs,” the note reads.
South Korea eyeing unregistered exchanges
Also according to KoFIU, the 16 exchanges based abroad are offering crypto services to South Koreans, including websites in Korean. The 16 exchanges are: KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex and Pionex. “However, it was found that the 16 entities have Korean-focused business operations without obtaining registration. Therefore, the authorities plan to take the necessary measures,” says KoFIU. KoFIU further stated that it notified the investigating authority of the breach of registration duties. In addition, it plans to inform the FIUs (Financial Intelligence Units) in their respective countries about the case. Another measure by KoFIU was to request the blocking of domestic access to the websites of unregistered exchanges to prevent their use in the country. At the same time, credit card companies will block the purchase of assets with credit cards on the exchanges in question. “Transfers of virtual assets to and from the 16 unregistered entities will be made impossible. This is because the authorities have issued administrative guidance demanding the suspension of transactions between registered and unregistered entities.
Alert to exchange users
Finally, to crypto users in the country, KoFIU stated that they must verify that the exchanges they use are registered to operate in the country. After all, unregistered businesses are more vulnerable to personal data breach risks and hacks, according to KoFIU. That’s because they don’t have the registration qualification, such as information security management system (ISMS) certification. Furthermore, KoFIU stated that these platforms are out of supervision. That is, they can be used for money laundering. South Korean authorities have stepped up their investigations into the crypto industry following the collapse of the Terra network in March this year. Seoul-based Terraform Labs and its co-founders Daniel Shin and Do Kwon are also under criminal investigation for suspected fraud. Also Read: CME To Launch ETH Options Three Days Ahead Of The Merge Also Read: Owners of Alleged MSK Crypto Pyramid Are Targeted by Police
