South Korea's Financial Intelligence Unit (FIU) has ordered blocks on 27 overseas cryptocurrency exchange websites that operate without required local registration. The action, announced on October 13 following reviews by the Korea Communications Standards Commission on October 6 and 7, targets major platforms including KuCoin, MEXC, BingX, Phemex, XT.com, Bitrue, CoinW, Poloniex, BTCC, and BitMart.
The website restrictions extend previous enforcement measures that limited app downloads and updates on Google Play and Apple's App Store. Authorities are escalating their approach to unregistered platforms.
Registration Requirements and Penalties
Crypto exchanges serving South Korean users must obtain Information Security Management System (ISMS) certification and file reports with the FIU. These requirements apply to overseas platforms that target Korean customers through Korean-language websites, local marketing, or support for Korean won payments.
Operators who fail to comply face penalties of up to five years in prison or fines of up to 50 million won, approximately $37,000.
Enforcement Actions
The FIU has referred 44 unregistered virtual asset service providers to investigative authorities. Authorities have also restricted credit card purchases of virtual assets from unregistered platforms and implemented measures to limit transactions between registered domestic exchanges and unregistered operators.
Regulators plan to monitor alternative domains used by affected exchanges to circumvent restrictions, with additional website blocks possible if platforms continue operating through new addresses. Authorities said they will provide guidance on withdrawal methods for existing users through the Digital Asset Exchange Association.
Broader Regulatory Actions
South Korea has intensified enforcement against crypto-related misconduct. In February, a Seoul court sentenced a crypto asset management firm CEO to three years in prison for token price manipulation and illegal profits of approximately 7.1 billion won, marking the first conviction under the Virtual Asset User Protection Act. In September, police opened cases against 26 South Korean users of the prediction market Polymarket over bets valued at approximately 17.6 billion won, with 18 referred to prosecutors.
Tokenization Plans
Despite the crackdown, South Korea is advancing plans to tokenize traditional financial assets. The country unveiled a phased roadmap for tokenizing stocks, bonds, and investment funds, with the first phase expected to begin in February 2027 following amendments to the Electronic Registration Act. Ripple recently partnered with Meritz Securities to explore digital asset custody and tokenization opportunities within the country's regulatory framework.
