The Korea Financial Intelligence Unit (KoFIU) has decided to pursue some crypto firms that lack proper regulatory approval.
A total of 16 firms have been in the regulator’s radar as they have not aligned with the regulatory approval.
These firms had advertised crypto and and had offered the services to the Koreans without having appropriate requisite registration.
Financial Services Commission is now planning to halt domestic access to foreign exchanges which are precisely not registered with the country.
At the current moment, the crypto exchanges have been given time to obtain their licenses.
Their last date to get hold of the licenses by September 24. If the websites do not fulfil the licensing requirements by the due date then the websites will be blocked immediately.
Additionally, users who have been dealing with these exchanges can be liable to face penalties as well.
A Total 16 Crypto Exchanges Have Been Picked Out
The move from the financial watchdog arrived after a supposed request from the intelligence unit that the local branch of these exchanges need to be scrutinised and eventually blocked.
Similar to this another advisory has been issued to the country’s other law enforcement agencies.
The investigation will be carried out on 16 exchanges which are currently operating in the country without the operational permit.
The violations are being looked at and that shall be duly conveyed to the nations that they are registered in.
The crypto exchanges that are in trouble are one of the many prominent crypto exchanges that operate all across the globe.
The exchanges are KuCoin, MEXC, Phemex, ZB.com, Bitglobal, CoinW, XT.com, Bitrue, CoinEX, AAX, ZoomEX, BTCEX, BTCC, Poloniex, DigiFinex and Pionex.
The need for registration for the crypto firms came into effect last year in the month of September after the Financial Transaction Reports Act.
Crackdown on the industry has intensified on the industry after the downfall of Terraform Labs which has been founded by Korean native Do Kwon.
It is currently mandated that cryptocurrency platform must own the Information Security Management System certification.
Penalty
The Korean Information Security Management System certification calls for a stringent maintenance of data which is tied to anti-money laundering and KYC provisions.
Crypto exchanges are supposed to follow the guidelines of the Specific Financial Information Act to operate in the South Korean market.
Failing to follow the guideline, the act orders up to five years of prison or 50 million ($43,500) fine.
Not just that a further ban on the fresh registration of these firms can be imposed as well.
In a past crackdown carried out last year close to 60 exchanges were shut down as they did not meet these requirements of the registration.
Presently, 35 companies have the proper licenses which will allow them to operate in South Korea.
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