South Korean authorities are preparing to restrict access to 27 cryptocurrency platforms that allegedly provided services to local users without the required registration. The decision was announced by South Korea’s Financial Intelligence Unit (FIU), which is stepping up its efforts to regulate the digital asset market and protect investors. The list reportedly includes major international crypto exchanges such as KuCoin, MEXC, Phemex, XT.com, Bitrue, CoinW, Poloniex, BTCC, BingX and BitMart, along with other platforms.
Companies whose servers are located in South Korea could be ordered to cease operations, while access to platforms hosted abroad would be blocked within the country. Under the proposed enforcement approach, regulators would no longer need to wait for users to report financial losses or for a full investigation to be completed. Establishing that a platform operates without the required registration could be sufficient to initiate restrictions.
South Korean law requires companies dealing in virtual assets to obtain an Information Security Management System (ISMS) certification and register their activities with the FIU. These requirements also apply to foreign platforms targeting the South Korean market. Indicators of local targeting may include a Korean-language website, advertising aimed at South Korean residents and support for payments in South Korean won.
Operating without the required registration can carry serious penalties, including up to five years in prison or a fine of up to 50 million won. According to the FIU, information on 44 unregistered operators has already been referred to law enforcement agencies. Registered cryptocurrency exchanges have also been instructed to restrict transfers of digital assets to addresses associated with these companies.
In addition, purchases of cryptocurrencies from unregistered operators using credit cards are being blocked. An industry investigation conducted in June found that trading fees on unregistered platforms ranged from 1.5% to 10%. By comparison, the average fee on South Korea’s five largest exchanges offering trading pairs denominated in won was approximately 0.16%.
An interesting detail: At the upper end of that range, a 10% trading fee is more than 60 times the average 0.16% fee cited for major domestic exchanges. This highlights how choosing a trading platform can significantly affect an investor’s costs, even before market volatility is taken into account. The crackdown reflects South Korea’s broader effort to bring cryptocurrency trading under tighter regulatory oversight.
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