South Korea Intensifies Actions Against KuCoin and BitMex Among Others
South Korea's Financial Intelligence Unit cracks down on multiple cryptocurrency exchanges for operating without proper registration.
South Korea Intensifies Actions Against KuCoin and BitMex Among Others
The Financial Intelligence Unit (FIU) of South Korea, which operates under the Financial Services Commission (FSC), has initiated enforcement actions against several cryptocurrency exchanges, including KuCoin and BitMex. These exchanges are accused of operating in South Korea without registration as a Virtual Asset Services Provider (VASPs) under South Korea’s Specific Financial Information Act.
According to local media reports published on March 21, 2025, South Korean authorities are contemplating sanctions such as blocking access to all crypto exchanges that fail to register as VASPs, in collaboration with the Korea Communication Standards Commission (KCSC).
Other exchanges implicated for breaching South Korean anti-money laundering (AML) and financial regulations include CoinW, Bitunix, and KCEX. These exchanges face accusations for operating without the necessary approvals and not adhering to compliance processes while providing marketing and support to South Korean investors.
🚨 South Korea is cracking down on unregistered foreign crypto exchanges! 🇰🇷🚫
The FIU is targeting KuCoin, BitMEX, CoinW, Bitunix, and KCEX for operating without proper registration. Authorities may block access to these platforms as part of stricter enforcement. 💥
— Pushpendra Singh Fan Club (@pushpendrajifan) March 21, 2025
Crypto companies involved in storage, brokerage, crypto sales, and management are mandated to report to the FIU. Non-compliance could lead to illegal activities, exposing companies to potential criminal prosecution, penalties, and administrative sanctions.
This regulatory shift in South Korea reflects a global trend, as authorities worldwide tighten regulations to enhance transparency, security, and compliance within the cryptocurrency sector.
Investigators Are Also Examining Homegrown Exchanges In South Korea
While investigations into international exchanges are ongoing, homegrown exchanges within South Korea are also facing scrutiny over potential financial misconduct.
Recently, authorities raided the crypto exchange Bithumb over allegations involving its former CEO Kim Dae-sik, who reportedly embezzled funds to purchase an apartment. Concerns emerged when it was disclosed that Bithumb transferred 3 billion Korean won (over $2 million) to Kim, who now serves as an advisor to the exchange. Bithumb counters that Kim had already taken a loan to repay the funds.
Historically, crackdowns on crypto exchanges violating regulations have been common in South Korea. In 2022, the FIU had requested the KCSC to block 16 unregistered exchanges, including KuCoin, MEXC, and Poloniex, thereby leading many exchanges to halt operations in South Korea.
Last February, the FIU reported that South Korea had only 31 registered crypto firms, down from 42 in 2024, resulting in delistings for several companies.
Furthermore, South Korea has laid plans to enhance AML rules, marking a significant regulatory restructure aimed at preventing financial crime. Recent announcements from the Bank of Korea also indicate an upcoming CBDC pilot project set to launch in April this year.
Key Takeaways
- South Korea is intensifying actions against unregistered crypto exchanges like BitMEX and KuCoin.
- Authorities are considering blocking access to exchanges not registered as VASPs.
- Bithumb was raided amid suspicions of embezzlement from its former CEO.
