South Korea Targets Unregistered Foreign Exchanges Like BitMEX and KuCoin for Illegal Operations
South Korea’s financial authorities have reportedly started taking action against several foreign crypto exchanges, including BitMEX and KuCoin, for offering services to Korean users without proper registration under the country’s Specific Financial Information Act.
Korean authorities are considering sanctions against several foreign exchanges that have been providing services to South Korean investors without proper registration, according to a report by The Korea Economic Daily. A spokesperson for the Financial Intelligence Unit (FIU) stated that the regulator is “reviewing access block measures for overseas exchanges that are still providing services to Korean investors through consultations with the Korea Communications Standards Commission.”
According to the report, crypto exchanges BitMEX, KuCoin, CoinW, Bitunix, and KCEX are under scrutiny for running Korean-language websites and targeting South Korean users with marketing and customer support, all without registering as crypto businesses in the country. Under current rules, any company dealing with cryptocurrency trading, custody, or management in South Korea must register with the FIU, and failure to do so could lead to criminal penalties and sanctions.
In 2022, the FIU requested the Korea Communications Standards Commission to block 16 unregistered foreign exchanges, including KuCoin, MEXC, and Poloniex, among others, which led to the withdrawal of many exchanges from the South Korean market.
In February, the FIU revealed there are only 31 registered crypto trading firms in South Korea, down more than 26% from 42 in 2024. The delisted companies include GDAC, ProBit, Huobi Korea, and Bitrade, among others. In addition to business hurdles, many platforms failed to renew their registrations, thereby leading to their exclusion from the nation’s registry, the report notes.