South Korea Forces Google to Block 17 Foreign Crypto Exchanges

South Korea has taken a significant step in its ongoing efforts to regulate the crypto industry by forcing Google to block access to 17 foreign trading platforms, including KuCoin and MEXC. This move, which took effect on March 25, is part of the country's broader strategy to safeguard local investors and enforce compliance with its stringent regulatory framework.

The Financial Services Commission (FSC), South Korea's top financial regulator, confirmed that Google Play had removed these exchanges from its platform. This action makes it impossible for new users to install the apps and for existing users to update them, further limiting their accessibility. The FSC stated that these platforms failed to register under South Korean law while actively targeting local traders, thereby violating the country's regulatory requirements.

South Korea is known for having some of the world's strictest crypto regulations. Under the Specific Financial Transaction Information Reporting and Use Act, any foreign virtual asset service provider (VASP) operating in the country must register with the Financial Intelligence Unit (FIU). Failure to comply can result in severe penalties, including hefty fines or even imprisonment for those involved.

The FSC emphasized that this latest measure aims to prevent financial crimes such as money laundering and protect investors from potential fraud. The regulator outlined the criteria to determine whether an exchange was operating illegally in the country. These included offering a Korean-language website, actively marketing to local users, and supporting transactions in Korean won.

This enforcement action is not the first time South Korean authorities have taken a hard stance against foreign exchanges. In 2022, the FIU identified and restricted 16 unregistered platforms, followed by another six in 2023. The latest crackdown signals that regulators are doubling their efforts to bring the crypto market under stricter oversight.

With major international exchanges facing restrictions, the dominance of local platforms like Upbit has only strengthened. Upbit controls a significant share of South Korea’s crypto trading market. This latest move against foreign exchanges could further consolidate Upbit’s position, making it the go-to platform for retail and institutional investors.

While South Korea’s regulatory framework may seem restrictive, it could pave the way for greater institutional involvement in crypto. By enforcing compliance measures and weeding out unregistered players, the government is creating a more structured environment that may attract traditional financial institutions looking for regulatory clarity before investing in digital assets. The country has also been taking steps to delay taxation on crypto investments, signaling a more balanced approach that seeks to encourage growth in the sector while ensuring investor protection.