OKX, a major player in the global crypto trading market, is currently facing scrutiny in South Korea. The Digital Asset Exchange Alliance (DAXA), which includes South Korea’s leading 5 crypto exchanges – Upbit, Bithumb, Korbit, Coinone, and Gopax, has formally complained to OKX with local regulatory bodies.
The complaint alleges that OKX has engaged in activities within South Korea without legal registration.
OKX Under Scrutiny
According to reports, OKX is accused of indirectly targeting South Korean investors for its “Jumpstart program” through Telegram influencers. This allegation arises despite OKX not directly offering services to South Korean investors.
The case pivots on OKX’s promotion mode, which reportedly involved compensating Telegram communities for marketing the Jumpstart program.
This situation reflects the broader regulatory environment in South Korea, where foreign exchanges must register before offering services to its citizens. This rule effectively limits foreign exchanges from legally serving South Korean investors.
Following the report by the Digital Asset Exchange Alliance (DAXA), the Financial Intelligence Unit (FIU), operating under the Financial Services Commission (FSC), is anticipated to commence a probe into OKX’s activities.
This expected investigation aligns with South Korea’s plan to implement more rigorous regulatory measures within the cryptocurrency market.
South Korea’s Stance On Crypto Regulations
Amid these regulatory developments, South Korea is also preparing to introduce more stringent crypto laws, which could result in severe penalties, including life imprisonment, for crypto offenders.
Earlier today, the Financial Services Commission (FSC) declared that breaches of the upcoming cryptocurrency legislation, which will be in effect from July 19, might lead to penalties including at least one year of incarceration or monetary fines amounting to five times the illicit profits gained.
Furthermore, it is worth noting that South Korea’s approach toward cryptocurrencies has been somewhat cautious before these recent developments. The nation has not classified digital currencies as financial assets and has barred financial institutions from engaging in cryptocurrency investments since 2017.
However, there are signs of a potential shift in South Korea’s crypto stance. The country’s Financial Supervisory Service (FSS) has recently expressed interest in seeking guidance on Bitcoin Spot Exchange-Traded Funds (ETFs) from the US Securities and Exchange Commission (SEC).
Particularly, Lee Bok-hyun, governor of the FSS, plans to meet with US SEC chairman Gary Gensler within the year to discuss various financial market aspects, including digital assets and Bitcoin spot ETFs. This meeting follows the SEC’s recent approval of several Spot Bitcoin ETF applications in the United States, marking a significant regulatory milestone.
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