Unlicensed Crypto Exchanges Kicked Out of South Korean Markets
KuCoin Mulls Return to South Korea with Regulatory Certainty
In a bold move, South Korean authorities have kicked out 14 unregistered crypto exchanges from Apple Store and Google Play. The Financial Service Commission (FSC) has also released a blacklist of these unregistered platforms, including global players like KuCoin and MEXC. Despite the ban, these global players, such as KuCoin, are planning a comeback in the South Korean market. Let'
's delve deeper and uncover the reasons behind this crackdown.
Clampdown on Unlicensed Global Players
On April 14, the Financial Intelligence Unit (FIU) made it clear that foreign Virtual Asset Service Providers (VADPs) operating without registering with local regulators are not welcome. This clampdown includes global crypto giants like KuCoin and MEXC. The statement also emphasized that apps used for financial transactions, foreign crypto exchanges, or businesses aiming to operate in South Korea must register with the FIU. Any app operating without proper authorization is deemed illegal, contributing to virtual asset activities. This move aims to shield users from the dangers of money laundering. This isn't the first time the FIU has taken such action. In 2022, around 16 companies were blocked, followed by six more in 2023.
KuCoin's Return to South Korea
Although unavailable in South Korea, the new CEO of KuCoin, BC Wong, is plotting a comeback for the popular crypto exchange. In an exclusive interview, Wong confirmed that once compliance is secured with major jurisdictions, KuCoin aims to reenter the South Korean market. Wong also mentioned that discussions with South Korean regulators are already underway. The regulatory landscape in South Korea is challenging, with its strict regulations potentially driving global players away from the local crypto market. If successful, this global player could quickly gain momentum and command the spotlight in the crypto landscape.
Insights:
- Under South Korean law, foreign Virtual Asset Service Providers (VASPs) must register with the country's Financial Intelligence Unit (FIU) to operate with Korean users, accepting payments in Korean Won or marketing to consumers in South Korea.
- The aim of the regulatory crackdown is to mitigate risks associated with unregistered exchanges, such as potential money laundering activities, data breaches, and hacking incidents.
- The ban is part of a broader effort to ensure compliance with local regulations and create a more regulated and secure cryptocurrency environment within South Korea.
- Google and Apple have removed unregistered crypto apps from their stores at the request of the FIU to prevent downloads and updates by affected users.
- The Financial Intelligence Unit (FIU) in South Korea has barred unregistered foreign Virtual Asset Service Providers (VASPs) like KuCoin and MEXC from operating in the country.
- The FIU has emphasized that apps used for financial transactions, foreign crypto exchanges, or businesses aiming to operate in South Korea must register with the FIU to avoid being deemed illegal.
- Despite the ban, the new CEO of KuCoin, BC Wong, has confirmed plans for a return to the South Korean market once the exchange secures compliance with major jurisdictions.
- Wong noted that discussions with South Korean regulators are ongoing, as the regulatory landscape in South Korea is challenging due to its strict regulations.
- The crackdown on unlicensed crypto exchanges is part of a broader effort to create a more secure and regulated cryptocurrency environment in South Korea, with the aim of protecting users from risks such as money laundering, data breaches, and hacking incidents.
