South Korea cracks down on unregistered crypto exchanges
As regulators around the world wake up to the exponential growth of the crypto industry, South Korea has become the latest country to launch a crackdown on unregistered cryptocurrency exchanges.
The government in Seoul has announced that all exchanges facilitating the purchase and sale of digital assets to South Korean customers must be registered in the country by September 24.
The Specific Financial Information Act has been introduced as the regulatory backbone against the crypto-industry and mandates the registration of any exchange operating in the Korean language that advertises to Korean customers, or accepts Korean Won.
The globalised nature of cryptocurrency exchanges makes it difficult for regulators to pin them down to a jurisdiction, however, with the looming threat of a five-year custodial sentence and 50 million won fine, it seems financial watchdogs in Seoul are intent on forcing exchanges to drop a regulatory anchor.
This could see the emergence of a swathe of Korean subsidy companies, as has been seen in the United States with Binance and OKcoin, with exchanges forced to begin more localised business operations.
It is expected that any unregistered exchanges will be blocked by South Korean ISPs from September 25. From this date, unregistered exchanges will be illegal.
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