South Korea: FSC takes action against 16 unregistered foreign digital asset exchanges

Sept 18,2022
South Korea: FSC takes action against 16 unregistered foreign digital asset exchanges

The Federation of financial services projects (FSC) has announced plans to take action against 16 foreign digital asset exchanges that are not properly registered but operate in South Korea.

In a press release, the Federation of financial stability indicated that the financial intelligence unit (FIU), a subsidiary of the Korea financial intelligence unit, which is responsible for supervising the registration of digital asset exchanges, has notified some exchanges.

Exchanges known as kucoin, poloniex, mexc, phemex and XT. COM, bitdog Lu, ZB. COM, bitglobal, coinw, coinex, AAX, zoomex, btcex, BTCC, digifinex and pioneer.

The notice said: "these 16 foreign appreciation service providers were found to be engaged in business activities for Chinese customers, providing Korean websites, marketing activities for Korean customers, and providing payment options to support credit card consumption and purchase of virtual assets.".

It is precisely because of this that the Federation of financial stability has shown that it has implemented control over these enterprises. First, the financial intelligence unit has informed the South Korean research government of its theme activities. The exchange's financial investigation unit in the country has long been aware of its illegal operations.

The financial intelligence unit also stipulated that the South Korean telecommunications regulatory organization should block China from browsing the exchange's website, and also required credit card companies to block their financial services. Registered exchanges are also marked to block all transactions with unregistered physical objects.

At the same time, customers are warned not to use such exchanges as far as possible and check whether their trading exchanges have been registered all the time. Unregistered exchanges increase the risk of disclosing personal information, hacking and participating in money laundering.

South Korea has tightened control and verification of digital assets

The financial intelligence unit has always been the core of South Korea's overall promotion of digital asset review. The institution was established in 2021 to undertake digital asset exchange.

As of December 2021, the financial intelligence unit has registered 29 digital asset exchanges that meet the standards of the special financial transaction data reporting and use act. This is also one of the 42 exchanges applying for licenses in the host country.

No exchange registered with the financial intelligence unit is exempt from enhanced regulatory verification. In July this year, prosecutors raided seven regional exchanges in connection with the investigation of Terra's green ecological collapse.

However, the improvement of regulatory review has not stopped the improvement of the Korean digital asset market. In a survey conducted earlier this year, the financial intelligence unit found that the sales of digital assets in South Korea reached US $46 billion in 2021, of which US $2.8 billion was recorded for investors.