[Exclusive] Block on Illegal Coin Exchanges in Jeopardy as Nine-Member BMC Review Committee Also Hints at "Review Suspension"

Effectively Left Unchecked Under the Pretext of Police Investigation
No Review Plans as 'Supplementary Materials' Requests Go in Circles
Last Year, Committee Asserted "Calls to Resume Review Violate the Constitution"

The Broadcasting Media Communication Deliberation Committee (BMCDC, formerly the Korea Communications Standards Commission) has hinted at the possibility of once again issuing a “suspension of deliberation” in response to requests to block illegal overseas virtual asset operator sites. As BMCDC and the Financial Intelligence Unit (FIU) shift responsibility to one another, criticism has arisen that illegal exchanges, which should be subject to crackdowns, are being left unchecked without any sanctions.

On March 12, the 1st Regular Meeting of the Broadcasting Media Communication Deliberation Committee was held at the Broadcasting Hall in Mokdong, Seoul. Photo by Yonhap News

According to documents submitted by BMCDC to the office of Assemblywoman Lee Juhui of the Democratic Party of Korea on July 20, the Committee stated, "Please note that when cases are under administrative or judicial proceedings at courts or other relevant institutions, we have conducted deliberations by taking their final judgments into consideration."

Under Articles 12 and 13 of the Deliberation Regulations on Information and Communication, if the same matter is subject to ongoing legal proceedings in court, or if the Committee deems it necessary, deliberation may be suspended. Given that police investigations into illegal coin sites are currently underway, it is highly likely that the Committee will once again invoke these regulations and repeat past decisions to suspend deliberations.

BMCDC further stated, "As repeated deliberation gaps have occurred due to delays in forming successor committees following the expiration of member terms, we believe that a parliamentary review of the legislative amendment to the ‘Act on the Establishment and Operation of the Broadcasting Media Communication Committee’ is necessary." However, since as early as March, the Committee has already established its full nine-member system and is operating normally. The current pause in deliberation is not due to vacancies among Committee members, and referring again to the past paralysis—an issue that has already been resolved—appears to be an attempt to obscure responsibility.

BMCDC’s tendency to postpone deliberation is also evident in its document exchanges with the FIU. On June 19, BMCDC requested documentation from the FIU to verify facts, but as of nearly a month later, no official reply has been received. BMCDC explained, "When the FIU first requested site access blocking, it did not submit any documentation proving the sites’ illegality, and we have continued to request supplementary materials since the initial submission." As a result, there are currently no plans in place for deliberation on the issues requested by the FIU.

BMCDC stated that, going forward, it will carry out deliberation only after thoroughly reviewing the details of the FIU’s future response, the status of ongoing investigations, and potential violations under the Act on Reporting and Use of Specified Financial Transaction Information. In particular, the Committee disclosed that the prerequisites for resuming deliberation would include comprehensive consideration of: ▲ regulatory parity with overseas virtual asset business sites such as Binance that are not subject to deliberation, ▲ the appropriateness of site-wide blocking measures based solely on failure to register, and ▲ policy measures that focus on blocking sites where user damages such as fraud have been confirmed.

Last year, on April 16, officials from BMCDC, the FIU, the Office for Government Policy Coordination, and the National Police Agency met for an inter-agency business meeting marked by fierce exchanges. At that time, the FIU stated, "In order to strengthen detection and crackdowns on unregistered operators under the Act on Reporting and Use of Specified Financial Transaction Information, we have notified investigation agencies and requested site blocking from the BMCDC. Currently, the National Police Agency is still investigating because it is difficult to identify representatives and so on, and the BMCDC is suspending deliberation due to ambiguous standards for determining domestic operations and police investigation suspensions." The FIU added that it had already blocked 31 applications (17 on Google and 14 on Apple) of overseas unregistered businesses in cooperation with Google and Apple, and called for the resumption of site deliberations.

BMCDC responded, "In accordance with the constitutional principle of minimizing administrative interference (executive censorship) in freedom of expression when a government agency with the status of a central administrative body conducts internet content deliberation, the amendment of the Broadcasting and Communications Commission Act and the original purpose of the Committee’s establishment mandate such restraint. Requiring the Committee to resume deliberation solely because the FIU has unilaterally carried out related actions could constitute coercion of administrative acts." In other words, the BMCDC countered the FIU’s request as potentially unconstitutional and as an attempt to force administrative action.

BMCDC also raised issues with the standards for illegality proposed by the FIU. The BMCDC argued that, in the absence of specific violations under the law, supporting evidence, or clear grounds, it is difficult to proceed with deliberation—especially since there is no precedent for overseas virtual asset sites, and standards for determining illegality must first be established. Furthermore, BMCDC questioned the FIU’s rules, which judge sites as illegal if they offer Korean-language services on their website, accept payment in won, or engage in advertising targeting Korean nationals—even if only one of these applies. BMCDC argued that there are uncertainties regarding fair treatment with other overseas businesses, the actual occurrence of won-based transactions, and whether the operator itself is directly promoting to Koreans. If these remain as mere internal FIU criteria, it raises even more concerns about their suitability as a basis for deliberation.

Dissatisfaction was also expressed over the FIU’s unilateral blocking of apps and invoking the Committee’s name without prior consultation. BMCDC stated, "We have not been informed in advance of any related matters from the FIU and regretful situations have arisen where we only learn of them through the media and the National Assembly. Using the Committee’s name without prior discussion can cause policy confusion, so we ask that in the future, such discussions or contacts be conducted in advance."

Assemblyman Lee stressed, "Given that illegal overseas virtual asset exchanges lead directly to investor harm, it is unacceptable for blocking deliberations to be delayed any longer. Relevant authorities must act responsibly and cooperate closely to establish a swift blocking system as soon as possible."

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