South Korean authorities are investigating several crypto exchanges, including KuCoin and BitMEX, for allegedly operating without proper licensing as virtual asset service providers (VASPs). The Financial Intelligence Unit (FIU) of the Financial Services Commission is considering sanctions against these exchanges, which reportedly serviced South Korean clients without complying with regulatory requirements. The country mandates that all crypto exchanges report to the FIU to operate legally. Following an investigation, the FIU reviewed a list of exchanges that provided marketing and customer services to Korean investors while bypassing compliance processes. Potential sanctions could include blocking access to these exchanges. In parallel, South Korean exchanges are also under scrutiny for potential financial misconduct, including a recent raid on Bithumb related to its former CEO's financial dealings. Moreover, allegations surfaced regarding payments made to list projects on major exchanges. The regulatory environment for crypto in South Korea is becoming more stringent, reflecting growing concerns over compliance and consumer protection.

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