The regulator wants to prevent credit card companies from temporarily serving these firms.
According to news1, the Financial Services Commission (FSC) of South Korea has informed 16 international cryptocurrency exchanges that they have violated the Specific Financial Information Act and should be investigated.
According to the article, despite the fact that the law forbids unregistered cryptocurrency exchanges from functioning without a license, the 16 organizations have apparently been providing bitcoin services to Koreans and hosting events targeted at Koreans. According to Cryptoslate, the impacted exchanges include Pionex DigiFinex, Poloniex, AAX, ZoomEX, MEXC, KuCoin, CoinEX, and Bitglobal, among others.
However, according to the report, the FSC’s Financial Information Analysis Institute section discovered the infraction.
The FSC seeks to stop these exchangers from conducting business on its soil. It has asked the Broadcast and Communications Commission and the Korea Communications Commission to block access to their websites from within the nation.
In the interim, the regulator wants to prevent credit card companies from offering their services to these companies.
The lack of the information security management system (ISMS) certificate, which puts consumers at risk of having their personal information stolen, was an additional point of contention for officials about cryptocurrency exchanges.
The officials also stated that people may use the transactions as a means of money laundering. A person operating an unauthorized and illegal exchange is subject to a maximum 5-year jail term or a fine of 50 million won ($37,900), as stated in the Act.
South Korea has one of the most comprehensive legislative frameworks for the bitcoin industry. Many bitcoin exchanges departed the country in 2021 after the government mandated that enterprises use ISMS certification.
Only five of the 35 virtual asset providers that have registered locally—UpBit, Coinone, Gopax, Korbit, and Bithumb—are in charge of more than 99% of the country’s cryptocurrency trading. Meanwhile, because of the recent failure of the Terra Protocol, there is now a greater emphasis on crypto regulation in the country.
