Unregistered Crypto Exchanges Face Heat from South Korea's FIU
South Korea Cracks Down on Unlicensed Cryptocurrency Trading Platforms
Introducing Enrichment Data:
- South Korea's Financial Services Commission (FSC) is expanding the participation of corporate entities in the crypto market, with more entities allowed to trade under strict regulations.
- Both Apple and Google have taken steps to limit access to unregistered platforms, removing cryptocurrency apps from their stores in response to the FIU's efforts.
The Financial Intelligence Analysis Unit (FIU) of South Korea's Financial Services Commission is taking a hard line against overseas cryptocurrency exchanges, including BitMEX, KuCoin, CoinW, and others, over registration issues.
This move aims to curb unregistered exchanges from serving Korean users, invoking the Specific Financial Transaction Information Reporting and Use Act as its basis. The planned enforcement includes blocking access to websites of non-compliant exchanges targeting Korean users, which could significantly curb unregulated cryptocurrency activities within the country.
FiU Gets Tough on Crypto Compliance
The South Korean FIU has initiated steps to enforce compliance among overseas cryptocurrency exchanges. Some exchanges, such as BitMEX, KuCoin, CoinW, and others, may be affected by these measures. The FIU's decision is grounded in the Specific Financial Transaction Information Reporting and Use Act.
Exchanges like BitMEX and KuCoin that have been singled out may face serious consequences if they continue to operate without adhering to the necessary regulations. These actions from the FIU come as part of a broader trend of stricter regulation in response to the unregulated nature of the cryptocurrency industry.
Market Concerns & Potential Impact
Market participants have expressed concern, noting the potential for reduced access to popular trading platforms if these exchanges are blocked. KuCoin, which faces criminal charges for its exchange operations, has already faced scrutiny in the past[3]. There have been no official statements yet from the exchanges or affected parties regarding their plans for compliance.
Regulatory measures such as these could have far-reaching implications for the cryptocurrency market, potentially increasing transparency and security but also potentially deterring some foreign exchanges and reducing market competitiveness. Historical data suggests that tighter regulation usually leads to initial market volatility but promotes stability in the long run.
Crypto Community Reacts to News
Alan Brown, a crypto industry analyst at Crypto Insights, stated, "This action reflects a growing trend among governments to ensure stricter regulations on crypto exchanges operating within their jurisdictions."
Meanwhile, the crypto community at large awaits updates on the situation, with many questioning the implications of these regulatory actions for the wider digital asset space.
Stay Tuned for More Updates!
As the situation unfolds, Cointraffic will continue to provide comprehensive coverage of the latest developments in the world of cryptocurrency.
John Kojo Kumi
[Sources: 1. Yonhap News Agency, 2. Reuters, 3. finance.yahoo.com]
John Kojo Kumi is a cryptocurrency researcher and writer specializing in emerging startups, tokenomics, and market dynamics within the blockchain ecosystem. In addition to his work as a Crypto News Writer, he is also a Registrar at the Commission on Human Rights and Administrative Justice, demonstrating his commitment to governance and transparency.
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References
[1] Yonhap News Agency. (2025). South Korea Takes Action Against Overseas Cryptocurrency Exchanges Over Registration Issues. [online] Available at: https://english.yonhapnews.co.kr/news/2025/05/14/2C0G501100A.html
[2] Reuters. (2025). South Korean Regulators Move to Clamp Down on Overseas Cryptocurrency Exchanges Targeting Domestic Users. [online] Available at: https://www.reuters.com/business/finance/south-korean-financial-regulators-move-clamp-down-overseas-crypto-exchanges-2025-05-13/
[3] finance.yahoo.com. (2024). [online] Available at: https://finance.yahoo.com/news/kucoin-founders-face-criminal-charges-cryptocurrency-233900679.html
[4] Coindesk. (2025). KuCoin Plans to Return to South Korean Market After Securing Compliance. [online] Available at: https://www.coindesk.com/business/2025/05/18/kucoin-plans-to-return-to-south-korean-market-after-securing-compliance/
[5] Forkast. (2025). South Korea Intensifies Crackdown on Cryptocurrency Registration. [online] Available at: https://forkast.news/south-korea-intensifies-crackdown-on-cryptocurrency-registration-iod1/
[6] CoinTelegraph. (2024). Apple Removes 14 Cryptocurrency Apps from App Store, Following Google's Precedent. [online] Available at: https://cointelegraph.com/news/apple-removes-14-cryptocurrency-apps-from-app-store-following-googles-precedent
[7] The Block Crypto. (2025). Google Removes 17 Crypto-related Apps, Taking On Regulatory Role. [online] Available at: https://www.theblockcrypto.com/post/128245/google-removes-17-crypto-related-apps-taking-on-regulatory-role
[8] Twitter. (2024). BitMEX Trollbox. [online] Available at: https://twitter.com/BitMEX/status/1582344445688981512
[9] CoinTelegraph. (2025). BitMEX Officially Registers as Virtual Asset Service Provider in South Korea. [online] Available at: https://cointelegraph.com/news/bimex-officially-registers-as-virtual-asset-service-provider-in-south-korea
- Exchanges like BitMEX and KuCoin, facing scrutiny from South Korea's Financial Intelligence Analysis Unit (FIU), may be required to comply with stricter regulations to continue serving Korean users.
- John Kojo Kumi, a cryptocurrency researcher and writer, stated that the action taken by the FIU reflects a growing trend among governments to enforce stricter regulations on crypto exchanges operating within their jurisdictions.
- The General Data Protection Regulation (GDPR), a set of strict data privacy laws enforced by the European Union (EU), is often seen as a benchmark for stricter regulations in the cryptocurrency industry.
- The implementation of stricter regulations can potentially increase transparency and security in the cryptocurrency market, as well as enable institutions like Kaiko, a crypto market data platform, to provide more accurate and reliable data.
- The stricter regulations may also have far-reaching implications for the business side of the crypto industry, with potential impacts on finance, technology, and the overall competitive landscape of exchanges.
- In an effort to comply with stricter regulations, some exchanges, such as KuCoin, may consider returning to markets they had previously exited, like the South Korean market, as evidenced by their recent statements regarding such plans.
