South Korea will block access to 27 crypto websites operated by unregistered virtual asset businesses. The Korea Communications Standards Commission approved the restrictions on October 6 and 7 following a request from the Financial Intelligence Unit (FIU).
The move extends existing restrictions on mobile apps from Google and Apple to websites. Authorities aim to block illegal crypto services before users suffer financial losses.
Registration Requirements and Penalties
Crypto businesses must meet requirements, including Information Security Management System (ISMS) certification, and register with the FIU to operate legally in South Korea. The rules apply to foreign platforms that target South Korean residents, with authorities considering whether a platform offers a Korean-language website, runs marketing campaigns for local customers, or supports payments in Korean won.
Operating an unregistered crypto business can lead to up to five years in prison or a fine of up to 50 million won.
Blocked Platforms
The 27 restricted operators include KuCoin, MEXC, Phemex, XT.com, Bitrue, CoinW, ZoomEX, Poloniex, BTCC, DigiFinex, Pionex, Blofin, Apex Pro, WEEX, BitMart, KCEX, BingX, P2B, Nonkyc.io, SUPEREX, CoinSolution, Sinbad Solution, Xgram, TapBit, CoinMy, BigOne, and UBit.
Risks Associated With Unregistered Platforms
The FIU warned that unregistered platforms may expose users to hacking, personal information leaks, money laundering, and investment fraud. Users could also lose money if a platform accepts payment without providing the promised crypto assets.
A joint investigation by the Digital Asset exchange Alliance (DAXA) found that transaction fees at detected illegal platforms ranged from 1.5% to 10%, as much as 62 times the average fee of 0.16% charged by South Korea's five largest domestic won-based crypto exchanges.
Enforcement Actions and User Assistance
The FIU has referred 44 illegal crypto companies to investigative agencies and introduced measures to prevent credit card purchases and payments involving unregistered providers. Authorities have also restricted transactions and requested website and app blocks.
The FIU plans to work with DAXA and the operators to provide information about withdrawal methods for existing users affected by the restrictions. Authorities will also monitor alternative websites that operators may create to bypass the restrictions and request further reviews and blocks when new sites are identified.
