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The Financial Services Commission announced


Aug 20, 2022

The Financial Services Commission announced on the 18th that it has notified investigative agencies of 16 overseas virtual asset exchanges, including MEXC and Cucoin, which have not been reported in Korea, on charges of violating the Specific Financial Information Act.

Overseas exchanges sanctioned by the Financial Services Commission on charges of violating the special law include Kukoin, Megs C, Pemax, Bitru, ZB Dotcom, BitGlobal, Coin W, CoinX, AAX, Polonix, BTCEX, BTCC, DigiFinex, and Pionex.

Domestic virtual asset exchanges have also restricted withdrawals to overseas exchanges, which have recently become a problem. Bithumb limited withdrawals of more than KRW 1 million to Megs C, Cucoin, and Pemax on the 12th. Cobit also deleted the withdrawal registered wallet addresses of these three geosaeso on the 8th. Coinone has restricted withdrawals to CoCoin, Megs C, Bitru, Polonix, CoinX, and BTCEX since the 16th.

The Financial Services Commission said, “We confirmed that the foreign exchanges are operating for Koreans by providing Korean language websites, holding events to attract Korean customers, and supporting them to purchase virtual assets with credit cards.”

Earlier, the Financial Information Analysis Institute (FIU) of the Financial Services Commission notified and guided foreign virtual asset businesses operating in Korea that they were subject to reporting under the Special Act. This is because, according to Article 6 of the Special Money Act, foreign exchanges are subject to the Special Money Act when they affect Korea.

The FIU notified the unregistered exchange of the violation of the reporting obligation under the special law to the investigative agency, and will also notify the FIU of the violation in the country to which the operator belongs. Unreported illegal business activities will be sentenced to up to five years in prison or fined up to 50 million won, and reports will be restricted to domestic virtual asset operators for the next five years.

The FIU requested the Korea Communications Commission and the Korea Communications Commission to block access to 16 exchanges in Korea to prevent the use of undeclared exchanges. Credit card companies will check and block virtual asset purchase and payment services using credit cards from foreign exchanges in Korea.

The Financial Services Commission recommended, “You must check whether the virtual asset business operator you use has been legally reported under the special law.”

As of the 18th, a total of 35 virtual asset operators have been reported.

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