South Korean regulators are taking decisive action against foreign cryptocurrency applications by requesting that 14 apps associated with unreported foreign crypto operators be blocked within the country. This move was announced in a statement made on Monday by the Financial Intelligence Unit (FIU) of South Korea.
Among the firms facing regulatory scrutiny are crypto exchanges KuCoin and MEXC, which have had their domestic app access blocked since April 11. As the regulatory landscape evolves, CoinDesk has reached out to both KuCoin and MEXC for their comments regarding these developments.
According to the FIU, foreign virtual asset business operators wishing to operate legally in South Korea must comply with the Act on Reporting and Use of Specific Financial Transaction Information, which necessitates reporting to the FIU. The statement emphasized that business activities carried out without proper reporting could result in criminal penalties.
In recent years, the FIU has prioritized targeting unreported virtual asset operators conducting domestic business without the necessary clearance. Notably, the regulator flagged 16 companies in 2022 and six companies in 2023 for engaging in such activities. In response, they have blocked access to the websites and mobile applications of these unreported operators.
This latest regulatory initiative aligns with South Korea’s ongoing efforts to curb illegal crypto operations. Last month, the FIU requested that Google block access to 17 apps, indicating a broadening approach to enforcing compliance. Moreover, reports suggest that the regulator is planning further actions to obstruct access to certain exchange sites.
The FIU has reiterated its commitment to mitigating money laundering risks and protecting users by continuing to block domestic access to mobile applications and online platforms operated by unreported foreign virtual asset businesses. The regulatory authority aims to collaborate with relevant stakeholders to enhance enforcement measures in this critical area.
As international cryptocurrency activity becomes increasingly scrutinized, stakeholders in the crypto industry should remain vigilant and informed about evolving regulatory requirements and compliance protocols within South Korea.
