OKX Faces Scrutiny in South Korea
A major player in the global crypto trading market, OKX, is currently under scrutiny in South Korea. The Digital Asset Exchange Alliance (DAXA), which includes South Korea’s leading five crypto exchanges (Upbit, Bithumb, Korbit, Coinone, and Gopax), has filed a formal complaint with local regulatory bodies against OKX. The complaint alleges that OKX has been operating within South Korea without proper legal registration.
Allegations of Indirectly Targeting South Korean Investors
According to reports, OKX is accused of indirectly targeting South Korean investors through its “Jumpstart program” by collaborating with Telegram influencers. Although OKX does not directly offer services to South Korean investors, the complaint focuses on their promotion mode, which allegedly involved compensating Telegram communities for marketing the Jumpstart program.
South Korea’s Regulatory Environment
This case highlights the regulatory environment in South Korea, where foreign exchanges must register before providing services to its citizens. This rule effectively restricts foreign exchanges from legally serving South Korean investors. In response to the complaint by DAXA, the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) is expected to launch an investigation into OKX’s activities. This aligns with South Korea’s plan to implement stricter regulatory measures in the cryptocurrency market.
New Stringent Crypto Laws and Potential Shift in Stance
South Korea is also preparing to introduce more stringent cryptocurrency laws that could result in severe penalties, including life imprisonment, for crypto offenders. The upcoming legislation will be effective from July 19. Previously cautious about cryptocurrencies, South Korea did not classify them as financial assets and prohibited financial institutions from engaging in cryptocurrency investments since 2017.
However, there are indications of a potential shift in South Korea’s stance. The country’s Financial Supervisory Service (FSS) has expressed interest in seeking guidance on Bitcoin Spot Exchange-Traded Funds (ETFs) from the US Securities and Exchange Commission (SEC). The FSS governor plans to meet with the SEC chairman within the year to discuss various financial market aspects, including digital assets and Bitcoin spot ETFs.
Hot Take: South Korea Takes Action Against OKX
South Korea is cracking down on OKX, a major global crypto trading platform, for allegedly operating within the country without proper registration. This move comes as part of South Korea’s broader efforts to implement stricter regulations in the cryptocurrency market. OKX is accused of indirectly targeting South Korean investors through its “Jumpstart program” by collaborating with Telegram influencers. The upcoming stringent crypto laws in South Korea could lead to severe penalties for crypto offenders, including life imprisonment. However, there are signs of a potential shift in South Korea’s stance, as the country’s Financial Supervisory Service seeks guidance on Bitcoin Spot ETFs from the US SEC.
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