South Korea’s Financial Services Commission (FSC) has taken significant action against unregistered cryptocurrency exchanges by blocking 14 of them from the Apple Store. This move follows a similar ban on Google Play, highlighting the government’s ongoing efforts to regulate the digital asset market and prevent illicit activities.
Key Takeaways
- 14 crypto exchanges, including KuCoin and MEXC, blocked on Apple Store.
- Action follows a previous ban on 17 unregistered exchanges on Google Play.
- The Financial Information Analysis Institution (FIU) is intensifying efforts to combat unregistered virtual asset service providers (VASPs).
- Penalties for operating without registration can include prison time and hefty fines.
Background of the Ban
On April 11, 2023, the FSC announced the blocking of 14 cryptocurrency exchanges from the Apple Store, citing their operation as unregistered overseas virtual asset operators. This decision is part of a broader initiative to regulate the cryptocurrency market in South Korea, which has seen a surge in user engagement.
The exchanges affected by this ban include well-known platforms such as KuCoin and MEXC. The FSC’s actions are aimed at protecting consumers and preventing money laundering activities associated with unregulated exchanges.
Previous Actions by Authorities
This latest ban comes shortly after Google Play blocked access to 17 unregistered exchanges on March 26, 2023. The FSC had previously published a list of 22 unregistered platforms, with 17 already restricted on Google’s marketplace. The regulatory body is committed to ensuring that all cryptocurrency operations within South Korea comply with local laws.
Implications for Users
As a result of the FSC’s actions, users will no longer be able to download the blocked apps from the Apple Store. Existing users will also face restrictions, as they will not be able to update their applications. This could lead to significant disruptions for users who rely on these platforms for trading and managing their digital assets.
Regulatory Framework
In South Korea, all operators involved in crypto sales, brokerage, management, and storage are required to register with the FIU. Failure to comply with these regulations can lead to severe penalties, including:
- Up to five years in prison
- Fines of up to 50 million won (approximately $35,200)
The FIU is actively considering further sanctions against unregistered VASPs, emphasizing the importance of compliance in the rapidly evolving cryptocurrency landscape.
Growing Crypto Market
The crackdown on unregistered exchanges comes at a time when the cryptocurrency market in South Korea is experiencing significant growth. As of March 31, 2023, the number of crypto exchange users in the country surpassed 16 million, representing over 30% of the population. Industry experts predict that this number could exceed 20 million by the end of 2025.
Interestingly, over 20% of South Korean public officials are reported to hold cryptocurrencies, with a total value of approximately $9.8 million. The assets held by these officials include popular cryptocurrencies such as Bitcoin (BTC), Ether (ETH), XRP, and Dogecoin (DOGE).
Conclusion
The South Korean government’s recent actions against unregistered cryptocurrency exchanges reflect its commitment to regulating the digital asset market and protecting consumers. As the number of crypto users continues to grow, the FSC and FIU are likely to intensify their efforts to ensure compliance and prevent illicit activities within the sector.
