South Korea has ordered domestic access blocks on 27 unregistered crypto exchange websites, the Financial Intelligence Unit announced on October 13. The blocks target major platforms including KuCoin, MEXC, Phemex, BingX, and BitMart.
The country's communications review body approved the access restrictions following reviews on October 6 and 7. Sites hosted abroad will face access blocks, while platforms with servers or operators in Korea will face service termination.
Enforcement Strategy
Regulators previously asked Google and Apple to block new installs and updates of unregistered exchange apps. Google Play restricted 17 such platforms in March 2025, including KuCoin and MEXC.
The FIU plans to seek blocks as soon as unregistered activity is detected, pending the review body's approval. This approach no longer requires court rulings or confirmed user losses before action is taken.
Operating without registration in South Korea can result in up to five years in prison or a 50 million won fine. The FIU has referred 44 unregistered operators to investigators and plans to target replacement sites that relaunch under new addresses.
Capital Flight and Fee Disparities
Korean investors paid foreign exchanges an estimated $3.5 billion in fees during 2025, according to Tiger Research. A June investigation by the Digital Asset eXchange Alliance and registered operators found that unregistered exchanges charged average fees between 1.5% and 10%, compared to 0.16% on Korea's five largest won-based exchanges.
Research firms tracked approximately 700 trillion won moved from Korean exchanges to overseas platforms between 2021 and 2026, though this figure includes projections and only traceable routes. Stablecoin outflows from Korea's major exchanges continued for an 18th consecutive month in June.
Domestic Market Challenges
Korean traders returning capital domestically will encounter a smaller market. Cryptocurrency on Korean exchanges lost 33% of its market value in the first half of 2026 compared to the second half of 2025, declining to 58.9 trillion won.
Some Korean capital has already moved beyond centralized exchanges. Tiger Research documented Korean-owned wallets depositing approximately $1.64 billion into decentralized platforms including Hyperliquid, Lighter, and Variational since January 2024.
The FIU urged users holding assets on unregistered platforms to withdraw them immediately and indicated it would guide users through available channels. Future outflow data may reveal whether traders shift funds to domestic registered exchanges or move further on-chain.
