South Korea’s Financial Services Commission (FSC) said on Oct. 13 that websites operated by 27 unregistered crypto platforms, including KuCoin, MEXC, BitMart, Phemex and BingX, will be blocked for users in the country.
The move is the first enforcement step against such operators to directly target their websites. Earlier measures included referrals to investigators and restrictions on paying those platforms by credit card.
Approval came after two review sessions
According to the FSC, South Korea’s media and communications standards regulator reviewed block requests submitted by the Financial Intelligence Unit (FIU), which is housed within the FSC, during two sessions on Oct. 6 and 7 and approved them.
Sites run from overseas will face access blocks, while Korea-based operators will face service termination. The FIU did not say when the blocks will take effect.
Beyond KuCoin, MEXC, BitMart, Phemex and BingX, the list also includes XT.com, Bitrue, Poloniex, BTCC, Pionex and WEEX, along with six sites listed under Korean names.
FIU plans earlier intervention
The FIU said it now plans to request a block as soon as it detects unregistered activity, rather than waiting for investigation results, a judicial ruling or confirmed customer losses.
It also said it will continue checking for replacement sites opened under new addresses and will submit those for review as well.
Registration is required for firms serving Korean residents
Under South Korea’s Act on Reporting and Using Specified Financial Transaction Information, any firm offering crypto services to Korean residents must register with the FIU. One of the requirements is ISMS security certification, among other conditions.
Foreign firms are also covered if they operate a Korean-language site, market to Korean customers or accept won-denominated payments.
Operating without registration carries penalties of up to five years in prison or a fine of up to 50 million won.
The FIU said there are 28 registered virtual asset service providers and that it has reported 44 unregistered operators to investigative agencies so far.
DAXA investigation highlighted fee gaps
The regulator also pointed to a joint investigation conducted in June by the Digital Asset eXchange Alliance (DAXA) and registered firms. That review found that unregistered operators charged average trading fees ranging from 1.5% to 10%, compared with an average of 0.16% at South Korea’s five won-trading exchanges.
Website blocks extend earlier app-store restrictions
Google and Apple, acting on FIU requests, had already blocked new installs of and updates to apps from unregistered operators for Korean users. With the new decision, the FSC said, websites are now covered as well.
The FIU told customers using unregistered operators to withdraw their assets immediately. It added that DAXA will guide users through withdrawal steps with the operators’ cooperation.
The regulator also warned that sharing referral links for those platforms could be treated as helping run an unregistered business, which could expose the referrer to criminal penalties.
Decision comes as FSC reviews exchange oversight
The website-blocking decision comes as the FSC is also weighing changes to how exchanges are supervised, including whether to allow crypto market making.
