South Korea’s Financial Services Commission (FSC) reported 16 foreign crypto exchanges to investigative businesses for violating the Specific Financial Information Act, news1 reported on August 18.
According to the report, the regulation prevents unregistered crypto exchanges from working with out a license, however the 16 corporations have been offering crypto providers for Koreans and internet hosting occasions focusing on Koreans.
The affected exchanges embody MEXC, KuCoin, CoinW, CoinEX, ZB.com, Bitglobal, Bitrue, Poloniex, BTCEX, Phemex, XT.com, Pionex, BTCC, DigiFinex, AAX, and ZoomEX.
The report revealed that the infraction was found by the Financial Information Analysis Institute arm of the FSC.
The regulators had knowledgeable the corporations about their obligation to report their operations, however they failed to comply.
FSC needs KuCoin, Poloniex, and others blocked
The FSC needs to block these exchanges’ continued operation inside its jurisdiction.
It has requested the Broadcast and Communications Commission and the Korea Communications Commission to block home entry to their web sites.
Meanwhile, the regulator needs to bar bank card firms from rendering their providers to these corporations.
The exchanges should not have an ISMS certificates
Officials described the exchanges as ill-equipped as a result of they don’t have the Information Security Management System (ISMS) certificates, which implies their customers threat having their private data leaked.
Apart from that, the officers added that malicious actors may additionally use the exchanges to launder cash.
Under the Act, a person working an unregistered and unlawful change may very well be imprisoned for up to 5 years or fined 50 million gained ($37,900).
The operator may even be unable to register as a home digital asset operator for 5 years.
The regulation applies to each foreign and native exchanges working throughout the nation.
South Korea’s crypto rules
South Korea has one of the comprehensive legal frameworks for the crypto business.
In 2021, the authorities mandated crypto corporations to get the ISMS certification, main to the exit of a number of crypto exchanges from the nation.
However, 35 digital property suppliers may register domestically –5 of these exchanges, UpBit, Coinone, Gopax, Korbit, and Bithumb, are liable for over 99% of the crypto transactions within the nation.
Meanwhile, the current collapse of the Terra ecosystem has led to increased emphasis on crypto regulation within the nation.