On December 4, South Korea's financial regulator issued an update urging individuals to report any unlicensed cryptocurrency exchanges offering services to users within the region. The collaboration between the Digital Asset Exchange Association (DAXA) and South Korea’s Financial Intelligence Unit (FIU) initiated this effort, involving major digital asset exchanges like Upbit, Bithumb, Coinone, Korbit, and Gopax, all operating in the country.
The objective of soliciting these reports is to identify domestic and foreign virtual asset business operators targeting Korean citizens while failing to comply with the provisions outlined in Article 7 of the Specified Financial Information Act.
Initially, the reports will undergo review by DAXA, following which the outcomes will be shared with the FIU. Subsequently, the FIU will determine the operator's status and whether further notification or action is warranted. An official from DAXA mentioned that the financial intelligence unit intends to take requisite measures, including informing investigative authorities, if the operator persists in undisclosed commercial activities. DAXA encourages reports through its whistleblower email address, requesting comprehensive information about the business, reasons for suspicion, and evidence of any concealed business activities.
This development aligns with South Korea’s increasing involvement in the cryptocurrency sector. Recently, on November 14, the country’s Democratic Party mandated its parliamentary candidates to disclose personal crypto assets, aiming for greater "transparency."
Moreover, South Korea’s Financial Supervisory Service (FSS) disclosed plans in October to prepare supplementary regulations to complement the Virtual Asset User Protection Act, which was passed earlier in 2023. Anticipated by January 2024, these new regulations aim to fortify the regulatory framework.
In a separate move, the Bank of Korea unveiled intentions to invite 100,000 citizens to participate in testing the forthcoming central bank digital currency (CBDC) slated for 2024.
