Bitmex, Kucoin among the exchanges that face sanctions in South Korea: here is why

The financial authorities of South Korea are considering imposing sanctions on several cryptographic exchanges that have not complied with local regulations.

According to a report From the local media of Korea Economic Daily, encryption exchanges include Bitmex, Kucoin, Coinw, Bitunix and Kcex.

South Korea to sanction encryption exchanges

The Financial Intelligence Unit (FIU) of the South Korean Financial Services Commission said that these cryptocurrency trade platforms abroad are illegally operating in the country because they have not reported as suppliers of virtual asset services (Vasps) under the specific financial information law.

The Special Financial Transactions Law establishes that entities that participate in trade, storage and cryptography management in South Korea must formally inform their activities to the FIU. Otherwise, it could attract criminal punishments and administrative sanctions because companies will be considered illegal companies.

In addition, these exchanges have been operating websites in Korean language without providing marketing and customer service for South Korean investors. As a result, the FIU is now investigating its activities, evaluating the appropriate procedures with relevant organizations and strongly considering measures such as the blocking of the site access.

“We are currently reviewing the access to the non -reported exchanges that provide services to national investors through the consultation with the Korean Communications Standards Commission. We are organizing cases of damage and related data to strengthen communication between the authorities, and we hope to see tangible measures taken within this year,” said a FIU official.

A continuous repression on cryptographic platforms

This is not the first time that the financial authorities in South Korea have made movements to sanction or block the access of investors to non -conforming encryption exchanges. In September 2021, the FIU requested more than 60 exchanges that they could not comply with local rules against money laundering (AML) and the registration requirements to close their services and leave the country.

At that time, only four commercial platforms, including UPBit, Bithumb, Coinone and Korbit, were completely operational, while another 28, other security certificates, could offer certain services without agreements won.

In addition, in 2022, the FIU asked the Korean Communications Standards Commission to block access to 16 exchanges abroad that they did not report their operations as Vasp. The regulatory agency also united forces with local card companies to block cryptography purchases and payment services made on these platforms.

Earl this year, the FIU revealed There are only 31 cryptographic companies recorded in South Korea, 26% less than 42 in 2024. With the last repression, that number is further obliged to those that will be further reduced.