The Financial Monitoring Service (FSS) flagged 16 unregistered virtual asset service providers for marketing to domestic investors.
All are based outside Korea and have no official domestic presence, the Korea Financial Intelligence Unit (KoFIU), part of the FSS, said Thursday.
They include KuCoin, MEXC, Phemex, XT.com, ZB.com, and Bitrue. KuCoin, headquartered in Seychelles, is one of the top 10 crypto exchanges in the world.
These entities were carrying out business activities aimed at domestic consumers as defined by the Law on Reporting and Use of Specified Financial Transaction Information, the KoFIU said.
Financial authorities in jurisdictions hosting service providers will be notified, credit card processing will be halted in the domestic market, and transfers of virtual assets will be blocked.
According to the KoFIU, the 16 companies “engaged in business activities targeting domestic consumers by offering websites in Korean, holding promotional events targeting Korean consumers, and providing payment options that support the purchase of ‘virtual assets using credit cards’. .
Financial regulators notified unregistered companies last July that they must register their businesses, but the 16 entities were found “to have business operations targeting Koreans without obtaining registration, and authorities therefore plan to take necessary measures,” the KoFIU said.
For illegal business activities of unregistered entities, a maximum of five years’ imprisonment or a fine of up to 50 million won ($38,000) can be imposed. They may also be barred from registering nationally for a period of time.
Authorities have urged investors to check whether their service providers are legitimately registered, citing risks to personal information and hacking.
“KoFIU will continue to closely monitor illegal business activities by unregistered entities and maintain close cooperation with relevant authorities,” he added.
BY JIN MIN-JI [firstname.lastname@example.org]