South Korea Plans Sanctions Against Overseas Crypto Exchanges Operating Illegally
South Korean financial authorities plan to sanction multiple overseas crypto exchanges operating illegally in the country. The affected exchanges include BitMEX, KuCoin, CoinW, Bitunix, and KCEX, which have not registered as Virtual Asset Service Providers (VASPs) under local regulations.
- KuCoin has a daily trading volume of $850 million.
- The Korea Financial Intelligence Unit (FIU) is investigating these platforms for providing services to South Koreans without proper registration.
- Authorities plan to block access to these exchanges with the help of the Korea Communications Standards Commission.
- Actions will be taken within this year.
- Operating without VASP registration can lead to criminal punishment and administrative sanctions.
South Korean Market Context
- South Korea ranks 19th in the "2024 Global Crypto Adoption Index" by Chainalysis.
- In December 2024, retail crypto trading volume reached $18 billion, surpassing stock market volume by 22%.
- Regulatory pressures have led to the closure of 11 crypto exchanges in the past year, reducing active exchanges to 31.
- Upbit ($1.88 billion) and Bithumb ($1.02 billion) account for most trading volume in the country.
- Upbit received a suspension notice from the FIU in January for AML compliance failures.