Recently, the South Korean government has taken a major decision to strengthen crypto regulations in the country. In the wake of this, the country’s Financial Services Commission (FSC) announced that their financial intelligence unit (KoFIU) is going after 16 unregistered crypto firms.
KoFIU has notified the authorities about the illegal business activities of the 16 unregistered foreign firms that are operating as virtual asset service providers (VASPs).
These 16 illegal firms include MEXC, Phemex, KuCoin, XT.com, Bitrue, Bitglobal, ZB.com, CoinW, CoinEX, AAX, Poloniex, BTCEX, BTCC, DigiFinex, ZoomEX, and Pionex.
According to the agency, these 16 firms have advertised cryptocurrencies and offered crypto-related services to the citizens without acquiring the required legal registration. All of them are based outside South Korea and have no formal domestic presence. They were engaging in “illegal crypto business activities” that targeted domestic South Korean citizens.
For instance, some of these sites offered content in the Korean language and conducted promotional events targeting domestic consumers.
It should be noted that KoFIU had previously notified all foreign-based crypto firms to acquire legal registration on July 22 last year. However, these 16 exchanges ignored this and continued operating in the country illegally.
Coming to the legal consequences of their action, the financial authority clarified that they will be facing severe charges. “For illegal business activities of unregistered entities, maximum of 5 years of imprisonment or up to KRW 50 million [$38,000] of fines can be imposed. They will also face a restriction for registering as a VASP in the domestic market for a certain period.”