Home
News
- Crypto exchanges are receiving hits from financial regulators across the world
- South Korean Financial Services Commission (FSC) has issued letters to 27 overseas crypto exchanges
- The agency warned the firms that they could be subject to sanctions if they do not suspend targeting South Korean residents
- The government is using the IP block method to prohibit access to the exchange platform’s website
- To operate in the region, the firms are required to register themselves with the Financial Intelligence Unit (FIU)
Crypto exchanges globally are facing hits from financial regulators. With the increasing demand and mainstream attention, the cryptocurrency industry is also witnessing soaring financial crimes. Following the scenario, we can deem that the industry has come under the radar of regulators. Hence, such agencies have strict rules on crypto firms. In a recent development, the top South Korean financial regulator has effectively blocked foreign cryptocurrency exchanges in the region.
Overseas digital assets exchanges are no longer allowed to operate in the region. However, only such exchanges will be prohibited who will be proved of actively targeting users based in the nation.
Korean FSC issued letters to 27 crypto exchanges
Local media outlets have revealed that the Financial Services Commission (FSC) has issued letters to 27 crypto exchanges. The regulator, which has been handed almost total control over policing exchanges, wants to inform the firms that they could be subject to sanctions if they do not suspend targeting South Korean residents.
Notably, the agency has sent letters to exchanges that it feels are actively targeting South Korean users. Indeed, the step of the regulator appears to be a direct response to the challenge of regulating such platforms.
Another hit to Binance exchange
Over the past few months, Binance has been facing severe turbulence. Regulators globally are smacking the cryptocurrency exchange. Mostly the regulators are prohibiting the firm as it is operating unlicensed. However, Binance is working with regulators to bring compliance.
Binance-like platforms in South Korea receive tremendous popularity. As a result, the regulators are planning to scrutinize such crypto exchanges that fail to comply with regulations and rules.
How will the regulator ban such platforms?
To block access to such platforms, the regulators will shut access to their websites. According to experts in the cryptosphere, IP blocks are the key weapon regulators use in their fight against unregulated activities.
According to Janet Cho, a Seol based IT journalist, government-ordered IP blocks have proved itself effective in terms of restricting access to illegal websites. However, many are using VPN services to gain access to such websites, but not many residents are using such ways. Remarkably, the older, less tech-savvy crowd of South Korea has exited the crypto markets.
Firms should register with the FIU agency
The FSC has kept some exceptions and will not prohibit all the crypto exchanges. However, the regulator deemed that to operate in the region, and the firms are required to register themselves with the Financial Intelligence Unit (FIU).
The agency will be carrying out the active policing of trading platforms by the end of September. However, it concerns that exchanges will have to partner with domestic banks to ensure real-name, anonymity-free transactions. Moreover, the firms will have their business models rigorously scrutinized and risk-assessed by both partner banks and regulators.
