South Korea Cracks Down on Numerous Exchanges Over Regulations

South Korea Cracks Down on Numerous Exchanges Over Regulations
  • The organization has identified 16 service providers.
  • Local exchanges’ offices were raided last month as part of an inquiry.

More than a dozen cryptocurrency exchanges risk losing clients in South Korea as officials crack down on international companies they allege are operating illegally in the country.

According to a news statement published by the Financial Services Commission (FSC) of South Korea on Thursday, the organization has identified 16 service providers that are not properly registered but are still providing their services to citizens of the nation.

The FSC’s intelligence division has notified the country’s investigating authority about the platforms and requested that domestic access to their websites be stopped. KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex were all identified as potential candidates.

Stringent Approach After Terra Collapse

The FSC claims that the companies in question lured Korean clients via marketing and Korean-language websites. The regulatory body issued a warning, saying unregistered markets lacked safeguards including certified information security management systems. According to them, this might make them vulnerable to attacks on their security.

In South Korea, the maximum sentence for engaging in commercial operations as an unregistered company is five years in jail or a fine of 50 million Korean won ($38,000). In addition, the providers’ home country intelligence agencies will be made aware of the situation. Since the demise of Terraform Labs’ TerraUSD (UST) stablecoin and its native token LUNA, South Korean authorities have stepped up their monitoring of the cryptocurrency industry.

Local exchanges’ offices were raided last month as part of an inquiry into whether Terra Labs CEO Do Kwon deliberately triggered the collapse of the Terra ecosystem. Also targeted was the residence of Daniel Shin, the other co-founder of Terra Labs.

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