The South Korean financial authorities plan to sanction and block access to several exchanges of cryptography abroad, in particular Bitmex and Kucoin, for having allegedly offered their services to Korean customers without registration.
Crypto exchanges abroad are risk sanctions
Friday, local information media hangyung reported The fact that the South Korea Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) has identified several foreign crypto exchanges providing services to Korean customers without appropriate recording.
The financial authority noted that many crypto exchanges abroad well known, in particular Bitmex, Kucoin, Coinw, Bitunix and KCEX, have not registered as virtual active service providers (VASP) despite the targeting of Korean users.
According to the report, cryptographic platforms operate Korean language websites or provide targeted market and customer support activities on Korean investors without notifying the authorities or depositing a Vasp license.
For the context, under the specified financial information law, exchanges must be officially registered as Vasp to the CRF to obtain a license and be able to carry out business in the country, such as storage, brokerage and management of cryptographic assets.
The fact of not presenting oneself to the financial authorities will make these platforms of illegal companies and will subject them to criminal and administrative sanctions. The CRF, which is investigating these exchanges, would have started to prepare measures, in particular by blocking access to their platforms, while consulting the competent authorities.
In 2022, the CRF asked the Korean National Security Agency to block 16 exchanges abroad, notably Mex, Poloniex and Kucoin, for having offered their services without registration.
The guard dog has also cooperated with national card companies to block purchases and payment services related to cryptography using credit cards in the country, which has led to the withdrawal of exchanges from the Korean market.
A CRF official said that the unit “currently examined measures to block access to unoblained exchanges abroad that provide services to national investors in consultation with Korea Communications Commission”.
In addition, they “strengthen communication between authorities by compiling data on damage and related data”, concluding that they “expect tangible measures to be taken during the year”.
The best Korean exchanges struck the controversy
South Korean exchanges also made the headlines after recent reports allegedly alleged that Upbit and Bithumb intermediaries have requested significant costs to list projects on their platforms.
According to Wu Blockchain, anonymous sources claim That various projects had “paid huge intermediary fees to make their token on the biggest exchanges of cryptocurrency in South Korea”.
The alleged fees were around $ 10 million and $ 2 million, respectively, the intermediaries being “linked to shareholders and Upbit market manufacturers”. Some projects said they “provided intermediate costs ranging from 3% to 5% of the total amount of tokens, and finally managed to be listed on Upbit successfully.”
Nevertheless, the first exchange of South Korean crypto denied allegations. On March 20, Upbit published a declaration refusing to have received quotation costs for commercial support for specific cryptographic assets.
Upbit does not authorize the involvement of external agencies to help or intermediate commercial support, and all procedures are carried out directly by Upbit employees. Consequently, if a specific company or person requests intermediary costs while claiming to guarantee commercial support in Upbit, please note that this is the act of illegal brokers unrelated to Upbit, and we ask for your particular prudence to avoid any damage from these actions.
Meanwhile, Bithumb also faces another cryptography scandal after South Korean politics increased its seat on Thursday.
As Bitcoinist reported, the company is the subject of an investigation to have potentially violated financial laws following the affirmations that the former CEO of exchange, Kim Dae-Sik, diverted about $ 2 million to buy an apartment for personal use.
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