South Korean financial authorities are contemplating sanctions on several crypto exchanges, including BitMEX and KuCoin, for not complying with local regulations.
Issues with Compliance to South Korean Regulations
The Financial Intelligence Unit of South Korea stated that overseas crypto exchanges like BitMEX and KuCoin are operating illegally in the country as they have failed to register as Virtual Asset Service Providers (VASPs) under the Special Financial Transactions Act.
Past Regulatory Actions
This is not the first time South Korean authorities have taken action against non-compliant crypto platforms. In September 2021, the Financial Intelligence Unit asked more than 60 exchanges, which failed to meet local anti-money laundering rules and registration requirements, to shut down.
Expected Impact on the Crypto Market
Earlier this year, the Financial Intelligence Unit reported there are only 31 registered crypto firms in South Korea, a 26% decrease from the previous year. The latest measures are expected to further reduce the number of companies in the market.
Sanctions against crypto platforms in South Korea could significantly impact the local crypto market by reducing the number of registered companies and restricting access to foreign platforms.
