South Korea tightens the rules on foreign crypto exchanges

South Korea is tightening its regulatory crackdown on unregistered international crypto exchanges, lately requesting that foreign virtual-asset service providers register with them to risk being shut down.

In April of this year, the Financial Services Commission (FSC), formerly the Financial Supervisory Commission, said that any Korean crypto exchanges that did not register with the regulatory body risked being shut down.

The FSC has now expanded its constitutional power to include international virtual-asset service providers.

The FSC said in a statement that it has issued 27 ‘warnings’ to virtual asset service providers:

“For foreign VASPs that continue to operate without registration beyond the September 24 deadline, the KoFIU will notify them of their illegal activities and take actions such as blocking access to their websites to inhibit their illegal business operations,”

The statement from South Korea went on to explain that if crypto exchanges do not register by the September deadline, they risk facing prison sentences or hefty fines:

“If foreign VASPs fail to register with the KoFIU, they shall cease their business operation targeting Koreans from September 25, 2021. They are notified of the possibility of being subject to penalties as prescribed by the Act if they continue to operate without registration.”

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