South Korea Tells Crypto Exchanges to Register or Face Jail

Key Takeaways

  • South Korea’s financial regulator has warned foreign cryptocurrency exchanges offering services to Koreans to register before Sep. 24.
  • The regulator says that any firms that fail to report to the agency face prison time or a fine.
  • The mandate is based on the South Korean law that requires know your customer (KYC) for all cross-border fund transfers.

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South Korea is cracking down on overseas crypto exchanges. The Financial Services Commission has warned 27 companies to stop serving South Korean nationals without reporting or having licensing norms in place.

South Korea Strengthens Overseas Crypto Trade Rules

South Korea is toughening its stance on overseas crypto exchanges.

The country’s Financial Services Commission (FSC) today confirmed it has notified 27 foreign virtual asset services providers (VASPs) active in the country to follow reporting norms.

As per a press release, several crypto exchanges and operators, whose names remain undisclosed, were ordered to report to the FSC’s Financial Intelligence Unit before Sep. 24.

The FSC warned that exchange operators that fail to meet standard reporting requirements before the deadline must stop or face prosecution.

Non-compliant crypto exchange operators may face imprisonment of up to five years or a fine of 50 million South Korea Won, the equivalent of around US$43,500. The mandate is based on the South Korean law that requires know your customer (KYC) procedures for all cross-border fund transfers. In the press release, the agency said:

“The Act requires VASPs to register with the KoFIU as the law equally applies to foreign VASPs that conduct activities outside Korea but have domestic consequences within Korea.”

The FSC has also advised cryptocurrency users must check whether a foreign crypto exchange they are dealing with has reporting requirements in place.

In addition, the FSC plans to take measures such as blocking access to specific websites, as well as cooperating…

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