To stop unregistered cryptocurrency businesses from operating there, South Korea is taking significant action. Apple removed 14 cryptocurrency exchanges’ apps from the South Korean App Store this week due to their noncompliance with the nation’s licensing regulations. This week, the Financial Services Commission (FSC) verified the development, asserting that MEXC and KuCoin are two of the impacted exchanges. The move supports Seoul’s initiatives to reduce the threats to the country’s financial stability and make its cryptocurrency ecosystem secure for investors.
According to the notice, all 14 of the blocked exchanges are foreign-based and were providing unlicensed cryptocurrency goods and services in South Korea. Apple and the national Financial Intelligence Unit (FIU) worked together to block the download of these unregistered exchanges. This suggests that the affected apps are no longer able to be updated or installed.
The South Korean financial regulators have specific standards by which they evaluate the domestic operations of international cryptocurrency companies.
“When making a decision, factors like whether a Korean website is offered, whether marketing events are held to draw in Korean clients, whether payment in Korean won is accepted, etc. are taken into consideration,” the FSC clarified.
The nation’s crypto-related registrations are supervised by the Financial Supervisory Service (FSS). Unregistered cryptocurrency companies are not protected by the government and may put users at risk financially.
Companies found to be violating regulatory requirements risk a punishment of KRW 50 million (about Rs. 30 lakh) and up to five years in prison. Authorities in South Korea have often discovered cryptocurrency companies breaking regulations in spite of these possible consequences. According to the FSC, it shut down 16 unregistered cryptocurrency companies with foreign headquarters in 2022 and another six in 2023.
“In order to prevent money laundering risks and user damage, FIU will continue to block domestic access through mobile applications (apps) and websites of overseas unreported virtual asset operators in the future, in consultation with relevant organizations,” the FSC noted.
Earlier in March, Google’s Play Store prohibited the installation of 17 international cryptocurrency exchanges, including KuCoin, on domestic Android smartphones. Whether Seoul will impose fines or a compliance schedule on the impacted exchanges is still up in the air.
The South Korean government, meantime, has advised cryptocurrency investors to only do business with organizations that are registered and licensed. On its portal, the FIU keeps track of registered cryptocurrency platforms.
Since you are not subject to anti-money laundering management and supervision, “dealing with unreported businesses may expose you to risks such as personal information leaks and hacking, and there is a risk that you may be used as a money laundering channel,” the FSC stated.
