South Korea Blocks 17 Crypto Apps on Google Play for Non-Compliance

South Korea’s Financial Intelligence Unit (FIU) has taken a significant step in its regulatory crackdown on unregistered cryptocurrency exchanges by blocking access to 17 overseas crypto exchange apps on Google Play. This action, announced on March 26, targets major platforms such as KuCoin, MEXC, Phemex, XT, CoinEx, BitMart, and Poloniex, which have been operating without the necessary registration. As a result, South Korean crypto users can no longer download these apps, and those who already have them installed will not receive future updates.

The FIU’s move is aimed at reducing money laundering risks and protecting users from the dangers of unregulated platforms. South Korean law mandates that all crypto exchanges, including foreign ones, must register with regulators before offering services. This requirement applies to foreign platforms that provide Korean-language interfaces, run marketing campaigns targeting Korean users, or process transactions in Korean won. The FIU considers unregistered operators meeting any of these criteria to be conducting business within Korea, subjecting them to legal consequences, including up to five years in prison or fines of up to 50 million won.

To further enforce these regulations, the FIU is collaborating with Apple Korea and the Korea Communications Standards Commission to restrict access on Apple’s App Store and block associated websites. The agency also maintains a public database of compliant exchanges, advising users to withdraw their assets immediately if an exchange is not listed. This regulatory clampdown comes amid a sharp rise in crypto participation in the country, with more than 9.6 million South Koreans holding accounts with the country’s five major licensed exchanges by the end of last year. This figure reflects a 52.6% increase over the previous year, signaling strong market confidence.

The fastest-growing segment of crypto investors includes older individuals. Those in their 50s surged to 1.75 million, while users over 60 climbed from 371,800 to 636,700—a jump of more than 52%. Additionally, wealth concentration among older users is notable, with over half of the 9,135 users holding over 1 billion won in digital assets being aged 50 or above. These investors own an average of 2.15 billion won in crypto, reinforcing the shifting demographics of Korea’s crypto elite.

This regulatory push is part of South Korea’s broader commitment to investor protection and financial integrity. The FIU’s actions are rooted in the Specific Financial Transaction Information Reporting and Use Act, which requires foreign virtual asset service providers catering to South Korean customers to register with the FIU. The agency’s efforts to monitor and restrict unregistered platforms have had a noticeable impact on the market, with exchanges like KuCoin Token experiencing minor price fluctuations. The crackdown extends beyond Google Play, with authorities working on blocking website access and coordinating with financial institutions to prevent transactions with unregistered platforms.

The FIU is also investigating platforms like BitMEX, CoinW, Bitunix, and KCEX for targeting local investors without registering as VASPs under the Specific Financial Information Act. Meanwhile, South Korean prosecutors have launched a separate investigation into Bithumb, one of the country’s largest exchanges, over allegations that company funds were misused to secure an apartment lease for its former CEO, Kim Dae-sik. These developments come amid a surge in crypto activity in South Korea, where the number of investors has been growing steadily.

For South Korean crypto traders, the FIU has made a list of registered operators available on its website, urging users to withdraw funds from unregistered exchanges and transition to compliant platforms. Moving forward, crypto exchanges may be forced to reevaluate their operational strategies. Those seeking access to South Korean markets will likely need to enhance compliance efforts and secure proper licensing to meet regulatory requirements. This crackdown signals a decisive push for compliance, reshaping access to foreign exchanges and emphasizing the nation’s commitment to investor protection and financial integrity.