FSC Warns Foreign Crypto Exchanges of Registration Obligations

The Financial Services Commission (FSC) in South Korea announced that the Financial Intelligence Unit (FIU), the Korean anti-money laundering agency, has sent a notice to a number of overseas crypto exchanges warning them a registration is mandatory in order to provide services to Korean residents. 

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Foreign-based cryptocurrency exchanges will be blocked and the platforms may face criminal investigations in South Korea if they don't comply with the country's new regulations for the sector. One of the key requirements is to register with FIU by Sept. 24. The regulations adopted earlier this year also require exchanges to have information security certificates, but none of them has obtained one yet, officials said.

The commission emphasized that foreign exchanges shall cease business operations in Korea as of Sept. 25 unless they register with the FIU. Unregistered activities will lead to penalties, including up to five years of imprisonment and a fine that can reach 50 million Korean won (over $43,000).

In a statement sent to the parliamentary National Policy Committee, the FSC elaborated:"Business activities carried out by overseas cryptocurrency exchanges targeting local customers without reporting to the Financial Intelligence Unit — an anti-money laundering unit under the Financial Services Commission — are illegal under the revised Act on Reporting and Using Specified Financial Transaction Information."

The Korea Herald notes that new regulatory measures regarding the exchange range from temporary suspension of operations to stricter reporting requirements, reveal a growing global crackdown on  crypto market.