South Korea Bans 31 Unregistered Crypto Exchanges From App Stores

South Korea's top financial regulator has taken significant action against unregistered cryptocurrency exchanges by removing 14 apps from Apple’s App Store and 17 from Google Play. This move targets major platforms such as KuCoin and MEXC, which were identified as "unreported foreign virtual asset operators." These exchanges failed to register with the Financial Intelligence Unit (FIU), a division of the Financial Services Commission (FSC), before offering services to Korean users.

The bans took effect on Google’s Play Store on March 25 and on Apple’s App Store on April 11. The FSC's actions are part of a broader crackdown on foreign exchanges that have been operating without proper registration in South Korea. Under South Korean law, virtual asset service providers must register with the FIU before conducting business domestically. Factors that trigger this requirement include having a Korean-language website, accepting payments in won, or marketing to Korean users. Violations can result in severe penalties, including up to five years in prison or fines of up to 50 million won.

Two of the exchanges targeted in this crackdown had no identifiable owners, according to a list of targeted platforms on the FSC website. Poloniex and BitMart were also named in the list, but both have yet to respond to requests for comment. This is not the first time the FSC has taken action against unregistered exchanges; previously, the regulator targeted 16 exchanges in 2022 and six more in 2023. The FSC's actions are aimed at preventing money laundering and protecting users from potential harm associated with unregistered cryptocurrency exchanges.

In January, South Korea proposed plans to upgrade its crypto task force into a permanent investigative unit. If approved, this unit will expand its authority and resources to combat crypto-related crimes more effectively. This proposal comes in the wake of several high-profile scandals, including a civil servant accused of embezzling nearly 500 million won in public funds to trade crypto, some of which came from flood recovery donations. Additionally, a former lawmaker was recently cleared of charges after being accused of hiding crypto assets, and a supposed crypto mining operation in Gwangju was revealed to be a front for illegal gambling funneling over 140 million won.

The FSC has also issued a warning to users about the risks of dealing with unregistered platforms. Currently, only 28 crypto businesses are officially registered in South Korea. The FSC's actions underscore the government's commitment to enforcing regulations and protecting its citizens from the risks associated with unregistered cryptocurrency exchanges. The FIU will continue to promote the blocking of applications and websites of such operators to prevent money laundering and user damage.