South Korea has emerged as a crypto-friendly nation in recent times, taking measures to protect its crypto community from financial risks. In a new development, the authorities there have launched an investigation into 16 crypto exchanges in the country for ‘illegal operations’. These exchanges include Kucoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, Coinw, Coinex, AAX, Zoomex, Poloniex, BTCEX, BTCC, Digifinex and Pionex. All designated crypto exchanges are headquartered outside South Korea and have been accused of conducting illegal business activities.
The Korea Financial Intelligence Unit (KoFIU), Seoul’s financial intelligence unit, is responsible for alerting authorities about foreign crypto exchanges allegedly operating their businesses in South Korea without being registered.
KoFIU had directed all foreign crypto exchanges to disclose themselves before 22 July. However, these 16 crypto exchanges failed to do so and continued to operate.
“KoFIU requests the Korea Communications Commission and the Korea Communications Standards Commission to block domestic access to the websites of unregistered virtual asset service providers (VASPs) to prevent the use of virtual asset services provided by unregistered entities,” South Korea’s Financial Services Commission (FSC) said in an official blog post,
According to the laws of South Korea, illegal business activities of unregistered entities can lead to a maximum imprisonment of five years or a fine of up to KRW50 million (approximately Rs 30 lakh) for their representatives.
In addition, these companies may also be barred from applying for an operating license in South Korea for a specific time period.
“Transfer of virtual assets from 16 unregistered entities will become impossible as authorities have issued an administrative guidance requiring the suspension of transactions between registered and unregistered entities,” the FSC’s blog post said.
KoFIU has pledged to continue to closely monitor the illegal business activities carried out by unregistered entities and to maintain close cooperation with the relevant authorities in taking necessary measures by promptly reporting them to the Investigating Authority.
In order for crypto companies to further nourish their financial ecosystem, the Asian nation has decided to delay imposing a 20 percent tax on crypto income until 2025.
The government of South Korea is planning to invest more than $177 million (about Rs 1,372 crore) in supporting the Metaverse projects, which will also create employment opportunities in the region. The country is betting on the “uncertain potential” it believes, the metaverse industry holds.
In fact, to protect its crypto investors from industry crashes and scams, the Financial Supervisory Service (FSS) of South Korea has decided to analyze the risk characteristics of domestic virtual assets to manage risks in the virtual asset market. .
