The South Korean Financial Services Commission (FSC) has accused 16 foreign cryptocurrency exchanges of violating local laws and providing digital asset trading services to Korean citizens.
The Financial Intelligence Unit of the FSC sent 16 cryptocurrency exchanges a notice of investigation. According to the regulator, the sites did not inform the South Korean authorities about the provision of services to the citizens of the country, which is a violation of the Special Act on the provision of financial information. The list includes exchanges KuCoin, MEXC, Phemex, Bitrue, ZB, XT, Btiglobal, Poloniex, Pionex, CoinW, CoinEX, AAX, ZoomEX, BTCEX, BTCC and DigiFinex,
According to the Special Act, if the site wants to provide digital asset trading services to Korean citizens, then it must have a security management system (ISMS) and be certified by the regulator. In case of violation of the act, the South Korean authorities can put the site management in jail for up to 5 years, or impose a fine of up to 50 million won (about $38,000).
FSC emphasizes that in July it notified the exchanges of the need to comply with the regulator’s standards, but the exchanges continued to provide services to citizens of South Korea. According to the Commission, the companies have a Korean-language interface on their websites and have even held special events for their customers in the country. In addition, they actively advertise their services and make it possible to buy digital assets using credit cards.
The regulator sent a request to local departments via electronic communication systems to block the websites and applications of these cryptocurrency exchanges.
“When using such operators, you risk losing your personal data, they can be hacked, since they do not have the necessary level of protection. In addition, you can be used for money laundering. Often such companies are widely advertised, so users need to be doubly careful, ”said the representative of the financial intelligence unit.
The regulator emphasized that the list of licensed companies providing services for working with digital assets is available on the FSC website. To date, 35 companies have received licenses.
It was recently reported that the South Korean tax authority will take tough action against tax evasion using virtual assets such as cryptocurrencies and platforms that work with them.