South Korea Cracks Down on Unregistered Overseas Crypto Exchanges: Report

South Korean financial authorities are intensifying efforts to clamp down on unregistered overseas crypto exchanges operating illegally in the country.

According to local reports on March 21, the Financial Intelligence Unit (FIU) of the Financial Services Commission has begun targeting several foreign platforms that have been providing services to Korean users without registering as Virtual Asset Service Providers (VASPs) under the Specific Financial Information Act.

South Korea’s FIU Targets BitMEX, KuCoin

Per the report, the FIU has identified crypto exchanges such as BitMEX, KuCoin, CoinW, Bitunix, and KCEX as part of its investigation.

These platforms reportedly offer Korean-language websites, marketing efforts, and customer support targeting local investors—all without complying with Korea’s VASP registration requirements.

Under current law, any entity involved in virtual asset trading, custody, or brokerage in South Korea must formally register with the FIU.

Non-compliance is considered illegal and can result in criminal penalties and administrative sanctions.

Authorities are now considering blocking access to these platforms as a potential enforcement measure.

The FIU is in consultation with the Korea Communications Standards Commission (KCSC) to implement website blocks and further limit the exchanges’ ability to operate in the country.

This is not the first time South Korea has acted against unauthorized crypto firms.

In 2022, the FIU requested the KCSC to block access to 16 unregistered foreign exchanges and worked with domestic credit card companies to prevent cryptocurrency-related transactions.

These efforts led many exchanges to withdraw from the Korean market and halt new user registrations.

An FIU official stated that damage cases are being collected and inter-agency communication is being strengthened.

“We are currently reviewing blocking access to unreported overseas exchanges that are providing services to domestic investors through consultation with the Korea Communications Standards Commission,” the official reportedly said.

“We are organizing damage cases and related data to strengthen communication between authorities, and we expect to see tangible measures taken within this year.”

Korean Prosecutors Raid Bithumb

Earlier this week, South Korean prosecutors launched a formal investigation into Bithumb, one of the country’s largest cryptocurrency exchanges, over allegations that company funds were misused to facilitate an apartment purchase for its former CEO.

The Seoul Southern District Prosecutors’ Office also executed a search and seizure operation at Bithumb’s headquarters in Yeoksam-dong.

Authorities suspect that Bithumb provided a 3 billion Korean won (approximately $2.4 million) lease deposit for an apartment in Seongsu-dong to its former CEO and current advisor, Kim Dae-sik.

According to YTN，South Korean prosecutors today conducted a raid on the headquarters of the cryptocurrency exchange Bithumb, investigating allegations that the company misused funds to support the purchase of a personal apartment for its former CEO. The case was referred by the…

— Wu Blockchain (@WuBlockchain) March 20, 2025

Last year, South Korea’s cryptocurrency investors crossed 15 million.

According to figures submitted by the Bank of Korea, 15.59 million South Koreans held accounts on the nation’s top five cryptocurrency exchanges by the end of November.

Deposits in crypto exchanges also doubled, rising from 4.7 trillion won ($3.2 billion) in October to 8.8 trillion won ($6.03 billion) in November.