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The Financial Services Commission of South Korea (FSC) accused 16 foreign cryptocurrency platforms of violating local laws and providing digital asset trading services to Korean citizens.
The financial intelligence unit under the FSC sent a notice of investigation to 16 cryptocurrency exchanges. According to the regulator, the sites did not inform the authorities of South Korea about the provision of services to citizens of the country, which is a violation of the Special Act on the provision of financial information. The list includes exchanges KuCoin, MEXC, Phemex, Bitrue, ZB, XT, Btiglobal, Poloniex, Pionex, CoinW, CoinEX, AAX, ZoomEX, BTCEX, BTCC and DigiFinex,
According to the Special Act, if the site wants to provide Korean citizens with services for trading digital assets, then it must have a security management system (ISMS) and be certified by the regulator. In case of violation of the act, the South Korean authorities can put the site management in prison for up to 5 years, or impose a fine of up to 50 million won (about $ 38,000).
The FSC emphasizes that in July it notified the sites about the need to comply with the regulator’s regulations, but the exchanges continued to provide services to South Korean citizens. According to the Commission, the companies have a Korean-translated interface on their websites and have even held special events for their customers in the country. In addition, they actively advertise their services and give the opportunity to buy digital assets with credit cards.
The regulator sent a request to local departments for electronic communication systems to block the sites and applications of these cryptocurrency exchanges.
“When using such operators, you risk losing your personal data, they can be hacked, since they do not have the necessary level of protection. In addition, you can be used for money laundering. Often, such companies are widely advertised, so users need to be doubly careful, “the representative of the financial intelligence unit emphasized.
The regulator stressed that the list of licensed companies providing services for working with digital assets is on the FSC website. To date, 35 companies have received licenses.
It was recently reported that South Korea’s tax authority will take tough measures against tax evasion using virtual assets such as cryptocurrencies and platforms working with them.
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