[Exclusive] Illegal Coin Exchanges to Be Blocked at Last... BMCRC: "To Be Blocked Like Scam Sites"

Prioritizing Review and Blocking for Sites With Confirmed Damages
FIU: "Internal Review and Reporting Underway"
Disagreements Over Excluding Binance From Review

The Broadcasting Media Communication Deliberation Committee (BMCDC) has proposed a plan to the Financial Intelligence Unit (FIU) to give priority to blocking overseas illegal virtual asset trading sites where concrete user damages have been confirmed. This marks the full-scale start of a process to block illegal cryptocurrency exchanges, which have caused significant losses, especially among young people.

On March 12th, Ko Gwangheon, Chairman of the Broadcasting Media Communication Deliberation Committee, is holding a regular meeting at the Broadcasting Hall in Mokdong, Seoul. Photo by Yonhap News.

According to data submitted by the BMCDC to the office of Assemblywoman Lee Juhee of the Democratic Party of Korea on July 31, the committee and the FIU held a work meeting on July 16 to discuss screening criteria for blocking overseas unregistered virtual asset business operators. The BMCDC suggested that sites where damages have been verified—such as money laundering with criminal proceeds, illegal foreign exchange transactions, tax evasion, and personal information leaks—be designated first as targets for blocking. The committee adopted the same approach used for scam site deliberations, relying on a "crime detection report" or "internal police investigation report" as the basis, once the police have recognized victims' damages. The BMCDC explained that the same method could be applied to foreign virtual asset service provider sites. The FIU responded, "We will internally review and report on the plan proposed by the committee."

Prior to this proposal, the FIU and the BMCDC had differing positions on the issue.

The FIU argued that, under the Act on Reporting and Use of Certain Financial Transaction Information, the problems with overseas virtual asset business operator sites cannot simply be viewed as unreported business activities. Its reasoning was that these sites could be linked to serious financial crimes affecting the public, such as investor fraud targeting young people, drug money laundering, illegal foreign exchange transactions, tax evasion, and personal information leaks. It also pointed out that police investigations had stalled because it was difficult to locate site operators. The FIU insisted that continued suspension of deliberations by the committee on the grounds that "investigations are ongoing" would only prolong regulatory gaps, highlighting the need for proactive site blocking measures.

The BMCDC's explanation was different. According to its internal rules, cases under investigation require deliberations to be suspended, and, as it had not received an official update on the investigation from the FIU, the committee stated it had no choice but to maintain its previous decision to suspend deliberations. The BMCDC also expressed concern that blocking an entire site solely for being unregistered could spark controversy over excessive regulation.

The BMCDC also met separately with the National Police Agency's Integrated Response Team for Telecommunications Financial Fraud on July 21. This was to request data confirming whether any of the sites, among those for which the FIU requested deliberation, were under police investigation for fraudulent crimes. The committee clarified, "We are currently checking whether any of the sites for which the FIU requested deliberation are being investigated by the National Police Agency for crimes such as fraud."

There were also differing views regarding Binance. The FIU explained that Binance was excluded from review because, following a government press release, it had suspended its Korean-language services and ceased domestic marketing. However, the BMCDC argued that excluding large exchanges from regulation based solely on the presence or absence of Korean-language services could be unfair.

The BMCDC emphasized that if blocking is grounded only on the availability of Korean-language services or marketing, once an operator stops such services, the reason for blocking disappears. This would mean the block would have to be lifted, effectively allowing operators, at their discretion, to circumvent regulations at any time. As a result, the world's largest exchange by trading volume, Binance, is currently excluded from review through such a loophole.

The issue of blocking illegal cryptocurrency exchanges is one that this publication has been highlighting under its "Coin Lawless Zone" investigative series. The FIU had previously asked for cooperation in blocking access to unregistered foreign virtual asset service providers (August 7, 2025; August 22, 2025; and January 12, 2026), but the BMCDC only began checking the facts on June 19 of the previous year. Since then, the committee has also hinted at the possibility of once again suspending deliberations on the blockade of illegal overseas cryptocurrency exchanges. The committee stated, "Please be aware that in cases where administrative or judicial procedures by courts or other related agencies are in progress, we have carried out deliberations while taking the final determination of those agencies into consideration."

On July 21, the FIU and the BMCDC released a statement saying, "We will continue to closely cooperate with investigative agencies to develop more effective measures based on objective evidence, and will strengthen our collaboration to ensure prompt blocking of access to illegal overseas virtual asset service provider sites."

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