South Korea’s Biggest Crypto Exchanges Join Forces with Regulators to Find Unregistered Operators
South Korea’s top five cryptocurrency exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, have partnered with financial regulators to search for “undeclared crypto operators.” The Digital Asset Exchange Association (DAXA) made the announcement. The association will collaborate with the Financial Intelligence Unit (FIU), which is accountable to the Financial Services Commission.
Cracking Down on Unregistered Platforms
DAXA and the FIU have called on the public to provide anonymous tip-offs regarding “undeclared virtual asset business operators.” South Korea has strict regulations on crypto exchanges, and currently, only the DAXA members hold operating permits for crypto-to-fiat trading pairs. As a result, unofficial platforms have emerged, advertising their services in crypto-themed chat rooms and social media.
Expanding the Scope of Investigation
The joint effort by DAXA and the FIU is not limited to South Korean platforms. They are also targeting overseas virtual asset business operators that fail to report their activities under the Specific Financial Information Act. Whistleblowers are encouraged to provide evidence of unreported business activities and reasons for suspecting undeclared businesses targeting South Korean users. The FIU may issue cease-and-desist orders to suspected firms, with potential legal consequences for non-compliance.
Hot Take: Collaboration Between Exchanges and Regulators Strengthens Crypto Regulation
The partnership between South Korea’s largest crypto exchanges and financial regulators demonstrates a proactive approach in cracking down on unregistered operators. By encouraging whistleblowers to come forward with information, the authorities aim to eliminate unauthorized platforms and ensure compliance with existing regulations. This collaborative effort sets an example for other countries and may contribute to a more transparent and secure crypto industry. As the industry continues to evolve, such initiatives play a crucial role in building trust and protecting investors.
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