On December 4, financial authorities in South Korea urged the public to report any cryptocurrency exchanges operating without a license in the region. This initiative is a joint effort between the Digital Asset Exchange Association (DAXA) and South Korea’s Financial Intelligence Unit (FIU). DAXA comprises five major virtual asset exchanges in South Korea, including Upbit, Bithumb, Coinone, Korbit, and Gopax.
The regulators aim to identify both domestic and international virtual asset business operators that are targeting Korean citizens without complying with Article 7 of the Specific Financial Information Act. The process involves DAXA initially reviewing these reports, followed by forwarding their findings to the FIU. The FIU will then communicate back to DAXA to ascertain the status of the operator in question and decide if further notification is required.
A DAXA official stated that if operators persist in conducting “undeclared business activities,” the FIU will consider taking appropriate actions, which may include alerting investigative agencies. DAXA has provided a dedicated email address for submitting reports, which should contain comprehensive information about the business, reasons for suspicion, and evidence of its undeclared activities.
These measures are part of South Korea’s increasing regulatory focus on the cryptocurrency sector. On November 14, the Democratic Party of South Korea required its parliamentary candidates to disclose their personal crypto holdings to enhance transparency.
In October, the South Korean Financial Supervisory Service (FSS) announced its plans to start drafting regulations to support the Virtual Asset Users Protection Act, passed earlier in 2023. These new regulations are expected to be implemented by January 2024.
Furthermore, on November 23, the Bank of Korea, the country’s central bank, revealed its plan to involve 100,000 citizens in testing its upcoming central bank digital currency (CBDC) in 2024, marking a significant step in the country’s exploration of digital currencies.
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