South Korea Intensifies Crackdown on Unauthorized Crypto Exchanges

• The endeavor was a joint effort by South Korea’s FIU and the DAXA.
• The authorities claim that they are collecting these records in order to identify exchanges.

On December 4th, South Korean financial authorities issued an update requesting that consumers disclose any unauthorized cryptocurrency exchanges providing services to customers inside the area.

The endeavor was a joint effort by the South Korean Financial Intelligence Unit (FIU) and the Digital Asset Exchange Association (DAXA). Upbit, Bithumb, Coinone, Korbit, and Gopax are five of the country’s most prominent virtual asset exchanges that are part of DAXA.

The authorities claim that they are collecting these records in order to identify local and overseas operators of virtual asset businesses that prey on Korean people in violation of Article 7 of the Specific Financial Information Act.

Severe Penalties

After DAXA reviews the reports, the findings will be sent to the FIU, which will then reply to DAXA with the operator’s status and any notification requirements. If operators continue to engage in “undeclared business activities,” a DAXA spokesman warned, the FIU will contact the investigating agency and take other appropriate actions.

Moreover, reports should include all relevant company information, suspect grounds, and proof of the company’s undeclared commercial activity; DAXA has said that tips may be sent to its tip email address.

Also, South Korea’s engagement in the cryptocurrency market is growing, and this development is part of that trend. Legislative candidates for the Democratic Party of South Korea were obligated to reveal their cryptocurrency holdings for “transparency” reasons on November 14th.

To augment the Virtual Asset Users Protection Act, which was approved earlier in 2023, the South Korean Financial Supervisory Service (FSS) said in October that it is starting to prepare regulations.

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