South Korea to Block Non-Compliant Cryptocurrency Exchanges

South Korean authorities are considering blocking cryptocurrency exchanges that operate without regulatory compliance. The Financial Services Commission’s FIU is investigating platforms that fail to report their status as virtual asset service providers ( VASPs ) under financial law.

The agency also consults with stakeholders and considers sanctions, including blocking access to offending exchanges.

South Korean Regulators Eye Cryptocurrency Exchanges
South Korea plans to crack down on exchanges that provide services to domestic users without VASP reporting. The FIU said that some exchanges, including KuCoin , have been marketing and supporting customers without complying with regulations. KuCoin said it is closely monitoring legal developments and is committed to compliance for the sustainable development of the cryptocurrency industry.

South Korea requires cryptocurrency exchanges to report to the FIU or face penalties for operating illegally. The FIU is considering blocking access to offending exchanges and consulting with the Korea Communications Standards Commission on how to implement the measure.

South Korean exchanges face tighter scrutiny 
South Korean cryptocurrency exchanges are under scrutiny over suspected financial misconduct. Prosecutors raided Bithumb on March 20 on suspicions that former CEO Kim Dae-sik embezzled money to buy an apartment, which Bithumb denies.

Additionally, there are rumors of intermediaries receiving money to help projects list on Bithumb and Upbit. Upbit requires disclosure of the list of projects that paid brokerage fees.