The official notice reads, ”The Korea Financial Intelligence Unit (KoFIU) announced on August 18 that it has notified illegal business activities of 16 unregistered Virtual Asset Service Providers (VASPs) to the investigative authority.”
In a bid to step up crypto regulations, the Korean Financial Intelligence Unit (KoFIU), a division under the Financial Services Commission (FSC), aims to block foreign cryptocurrency exchanges that lack domestic licenses to carry out their operations. The news came a few days after the Philippines announced closing the application window for new VASP registration for three years.
In an official statement, the KoFIU reveals that the agency has flagged 16 crypto exchanges, including Poloniex, CoinEX, KuCoin, Pionex, and others, for providing their services without operational permits.
The FSC has asked the Korea Communications Commission and the Korea Communications Standards Commission to block access to unlicensed VASPs’ local websites.
Furthermore, the statement instructs all foreign crypto platforms operating nationwide to obtain the necessary permits by September 24. This includes acquiring a certification from the Korean Security Management (ISMS) regarding Anti-Money Laundering (AML) and Know-Your-Customer (KYC) provisions.
The crypto exchanges must also follow the instructions set by the Specific Financial Information Act to provide their services in South Korea legally; failure to comply with its guidelines can lead to five years in prison or a fine of 50M Won ($37,840.) Moreover, the firms can also be banned from registering their crypto exchanges for a certain period.
Lastly, KoFIU cautions users to ensure that the VASP they are dealing with is legally registered and states that they will continue monitoring the “illegal activities” carried out by unregulated VASPs.
