FIU: "All Virtual Asset Operators Except 28 Registered Are Illegal"... Warning on Illegal Coin Exchanges

As the activities of illegal virtual asset operators through social networking services (SNS) have become more widespread, the financial authorities have issued guidance on major cases to prevent damage.

The Financial Intelligence Unit (FIU) under the Financial Services Commission announced on June 24 several major cases of illegal virtual asset business activities, based on civil complaints, media reports, and its own investigations.

First, there are illegal overseas exchanges. These illicit exchanges provide virtual asset trading and brokerage services to Koreans in foreign languages, cleverly concealing their domestic business activities. They attract new customers through events in Telegram or KakaoTalk open chat rooms, but use English during customer consultations to evade regulations.

There are also illegal currency exchanges that directly trade virtual assets such as stablecoins and convert them into legal tender like the won. Both domestic and foreign individuals who wish to remain anonymous use platforms such as Telegram to exchange stablecoins anonymously.

Promoting illegal virtual asset operators is also unlawful. For example, a YouTuber may introduce and recommend an overseas exchange to viewers in exchange for referral commissions from the exchange, which constitutes illegal brokerage.

Users of illegal virtual asset operators may be exposed to risks such as personal information leakage and hacking, and may also suffer financial losses if they do not receive virtual assets after making payments. This is because illegal virtual asset operators do not establish anti-money laundering measures or user asset protection mechanisms, and do not meet security requirements.

There are 28 virtual asset operators that are properly registered with the FIU, including Dunamu and Korbit. All other companies supporting virtual asset trading in Korea are illegal. According to the Act on Reporting and Use of Certain Financial Transaction Information, any business seeking to operate as a virtual asset operator in Korea must report to the FIU, and overseas operators must also follow the same reporting procedures if they wish to conduct business targeting Korean users.

The FIU is taking various measures to eradicate illegal virtual asset activities, such as notifying investigative agencies and blocking access to illegal sites.

An FIU official said, "Exaggerated or false advertisements such as 'high returns and principal guarantee' or 'private information' should be viewed as potentially fraudulent, and you should never participate in signing up through referral links." They added, "If you suspect illegal virtual asset activities, you can report them to the FIU, the Digital Asset eXchange Alliance (DAXA), or the police, and you can also file a direct report with investigative agencies."

This content was produced with the assistance of AI translation services.