South Korea’s Financial Services Commission (FSC) will be blacklisting 16 overseas crypto exchanges for their inability to register in the country. The entities have been ordered to get their license for operation in South Korea by September 24.
The watchdog says those who fail to do so will cease to operate in the country. Additionally, users who continue to patronize the affected exchanges after the deadline may face a penalty.
Penalties For Offenders
The commission has issued a similar order to the country’s law enforcement agencies. The FSC could start probing the foreign exchanges that operate in the country and report their license violations to jurisdictions where they operate.
The crypto exchanges on the regulator’s radar are CoinEX, KuCoin, Bitrue, XT.com, Pionex, DigiFinex, BTCEX, Poloniex, BTCC, AAX, Pionex, MEXC, ZoomEX, Phemex, Bitglobal, and ZB.com.
The regulator has outlined the requirements for crypto exchanges to be allowed to operate in the country. One of the licenses is to gain a certification from the Korean Information Security Management System (ISMS). This certification requires strong data maintenance for Know Your Customers (KYC) and anti-money laundering provisions.
Additionally, they are required to maintain the guidelines of the Specific Financial Information Act before being allowed to operate in the country. Failure to operate without a permit can lead to serious fines, which include a 50 million won ($43,500) fine or up to 5 years in prison.
South Korea Opens Arms To Cryptocurrency
Last year, the FSC forced close to 60 crypto exchanges to shut down in the country because they failed to meet the requirements. At the moment, 35 such firms are believed to have received licenses to operate. These include the top five exchanges in the country, Upbit, Coinone, Bithumb, Korbit, and Gopax, which account for 99% of the total market.
South Korea has proven to be a crypto-friendly region, with President Yoon Suk-yeol proposing to defer the supposed crypto tax law that would have kicked in from January 2023. He stated that the crypto tax will only be reasonable when there is a good market infrastructure for trades in digital assets.