South Korea’s financial intelligence reports on 16 illegal foreign cryptocurrency firms

Photo - South Korea’s financial intelligence reports on 16 illegal foreign cryptocurrency firms
The KoFIU is warning digital currency holders about illegal organizations in the local crypto market.
According to the financial intelligence report, 16 organizations, including KuCoin, Bitrue, Bitglobal, CoinW, and CoinEX, will be subject to anti-money laundering measures.

South Korea’s financial intelligence, which is part of the Financial Services Commission, claimed that illegal foreign crypto firms were operating. The organizations advertised cryptocurrency and provided services to locals without registration.
The 16 foreign-based VASPs were found to have been engaged in business activities targeting domestic consumers by offering Korean-language websites, having promotional events targeting Korean consumers, and providing a payment option that supports the purchase of virtual assets using credit cards.
KoFIU said in a statement.
The listed crypto platforms were engaged in illegal commercial activities despite the mandatory registration requirement. The authorities will take necessary measures in this regard.

So what awaits unregistered firms?

According to current legislation, when foreign companies violate registration obligations, the KoFIU informs the financial authorities of the respective states.

As a punishment, violators face a fine of up to 50 million won with a ban on registering as a virtual asset service provider (VASP) in the South Korean market for a set period or imprisonment for up to five years.

The KoFIU also reports the following additional restrictions:
  • blocking internal access to illegal entities’ websites to prevent them from providing services to the public;
  • verification and blocking of virtual asset purchase and payment services provided by illegal firms, companies that issue credit cards;
  • suspension of transactions between registered and unregistered firms, making it impossible to transfer digital currencies to and from offenders.

Note to users

South Korean regulators urge cryptocurrency holders to make sure their chosen cryptocurrency platforms are legitimate. What are the dangers of firms operating illegally?

1. The risk of hacking amidst the lack of information security management system certification.
2. Money laundering resulting from the lack of regulatory control.
3. Dissemination of false information, encouraging cryptocurrency holders to use the services of illegal organizations.

To ensure investors’ safety and combat money laundering, KoFIU plans to continue monitoring the activities of financial institutions and calls for the cooperation of residents who encounter illegal firms.