FIU, Broadcasting Media and Communications Review Commission Block Domestic Access to 27 Illegal Crypto Exchanges

Action against VASPs unreported under the Specified Financial Transaction Information Act
Illegal operators pose a high risk of investment fraud.

Following the blocking of apps on Apple and Google platforms operated by 27 entities, including illegal virtual asset exchanges, South Korea has also blocked domestic access to their websites.

The Financial Intelligence Unit (FIU) under the Financial Services Commission said on October 13 that the Broadcasting Media and Communications Review Commission had decided to block domestic access to the websites of 27 illegal virtual asset service providers. These providers are unreported virtual asset service providers (VASPs) under the Act on Reporting and Using Specified Financial Transaction Information. The decision followed deliberations on October 6 and 7, after the commission received a request from the FIU.

The illegal operators whose websites the commission decided to block are Kucoin, MEXC, Phemex, XT.com, Bitrue, CoinW, ZoomEX, Poloniex, BTCC, DigiFinex, Pionex, Blofin, Apex Pro, WEEX, BitMart, KCEX, BingX, P2B, Nonkyc.io, SUPEREX, Coin Solution, Sinbad Solution, Xgram, Tapbit, Coinmy, Bigone, and Ubit.

These unreported virtual asset service providers are not subject to regulation or supervision under relevant laws, including the Virtual Asset User Protection Act and the Specified Financial Information Act. As a result, they may lack anti-money laundering (AML) systems and institutional safeguards to protect users' assets. Investors may therefore be exposed to risks such as personal information leaks and hacking, while their investments could be misused to conceal criminal proceeds, including drug money, or as a channel for money laundering. Financial losses from investment fraud may also occur, for example, when operators take payment for transactions but fail to deliver virtual assets to investors, or charge them excessively high fees.

To legally operate as a virtual asset service provider in South Korea, a business must register with the FIU. The same requirement applies to overseas operators that serve South Korean customers. There are currently 28 registered virtual asset service providers, which can be verified on the FIU website.

The FIU supervises registered virtual asset service providers to ensure they do not transact with unreported operators. When an unreported operator is detected, the FIU notifies registered providers and requires them to restrict the transfer of virtual assets to that operator. In addition, through joint investigations with the Digital Asset eXchange Alliance (DAXA) and in response to complaints and reports, the FIU has notified investigative agencies about 44 illegal operators.

An FIU official said, "To address inconveniences caused by access restrictions, such as existing users being unable to withdraw their assets, we plan to minimize the adverse effects of the restrictions by working with the operators and DAXA to provide detailed guidance and support on withdrawal methods and procedures. Investors should make sure that the virtual asset service provider they use is properly registered. If they find that it is unregistered, they should withdraw their virtual assets and deposits and take care not to provide the unregistered operator with their private keys, login information, copies of identity documents, or other such information."

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