South Korea’s Financial Services Commission (FSC) has reported 16 foreign crypto exchanges to investigative agencies for violating the Specific Financial Information Act, Cryptoslate reported quoting news1.
As per the report, the 16 companies have reportedly been offering crypto services to Koreans and conducting events geared toward Koreans despite the law prohibiting unregistered cryptocurrency exchanges from operating without a license. The affected exchanges include Pionex DigiFinex, Poloniex, AAX, ZoomEX, MEXC, KuCoin, CoinEX, Bitglobal, among others, Cryptoslate noted.
However, the Financial Information Analysis Institute division of the FSC identified the violation, as per the report.
The FSC aims to prevent these exchanges from carrying on business within its territory. It has requested that their websites not be accessible from within the country from the Broadcast and Communications Commission and the Korea Communications Commission.
The regulator seeks to forbid credit card providers from providing their services to these businesses in the interim.
Official further criticised the crypto exchanges as they do not have the information Security management system (ISMS) certificate, which puts users at danger of having their personal information stolen.
The officials also mentioned that individuals can utilise the exchanges to launder money. According to the Act, a person running an unlicensed and unlawful exchange faces a maximum 5-year prison sentence or a fine of 50 million won ($37,900).
One of the most complete legal frameworks for the cryptocurrency business is found in South Korea. When the government required cryptocurrency businesses to obtain the ISMS certification in 2021, numerous cryptocurrency exchanges left the nation.
35 virtual asset providers might register locally, but only five of those exchanges—UpBit, Coinone, Gopax, Korbit, and Bithumb—are in charge of more than 99% of the nation’s cryptocurrency trades. Meanwhile, there is now more focus on crypto regulation in the nation as a result of the recent collapse of the Terra ecosystem.
(With insights from Cryptoslate)
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