The Korea Financial Intelligence Unit (FIU) is taking action against 16 foreign-based cryptocurrency exchanges for failing to register with relevant authorities in the country.
The FIU has informed the appropriate investigating authority that 16 virtual asset service providers have been conducting business without the required registrations.
Along with 13 other exchanges that the FIU is expected to restrict, major exchanges like KuCoin, Poloniex, and Phemex were included.
By providing websites in Korean, hosting marketing campaigns that target Korean consumers, and allowing credit card payments for Bitcoin transactions, all 16 exchanges have ostensibly participated in economic activities with a domestic consumer audience in mind.
The Financial Transactions Report Act governs each of these actions. By reporting the breach of registration obligations, the FIU has already taken action against the unregistered exchanges.
They now plan to alert their counterparts in the countries where the enterprises are located of this infraction. Unregistered organizations risk a five-year prison sentence, a $37,000 fine, and a possible ban on further registration in the nation.
Additionally, a request has been made to the Korea Communications Commission and the Korea Communications Standards Commission to prevent access to the exchanges’ websites from within the country.
The identification and blocking of bitcoin purchases made using credit cards have been asked of credit card service providers. In an effort to stop transfers to other platforms, the FIU has also mandated that transactions from the 16 unregistered businesses be suspended at all registered exchanges in the nation.
The Financial Services Commission of South Korea set July 2022 as the deadline for domestic and international companies involved in the cryptocurrency industry to register with the appropriate agencies.
The deadline for businesses to register before they are subject to criminal prosecution as well as the potential fines and penalties outlined above is September 24.
The FSC has promised to speed up the study of the 13 distinct cryptocurrency-related laws that are now being debated by the National Assembly, while the FIU focuses on unregistered exchanges.
An effort is being made to create laws that take a balanced approach to market stability, investor protection, and blockchain growth.