SEOUL, SOUTH KOREA – December 4, 2023 – Financial regulators in South Korea have announced a collaborative effort to combat unlicensed cryptocurrency exchanges by urging users to report any such entities offering services to residents in the region. The Digital Asset Exchange Association (DAXA) and the Financial Intelligence Unit (FIU) are spearheading this initiative, seeking assistance from the public to identify virtual asset business operators not adhering to Article 7 of the Specific Financial Information Act.
DAXA, consisting of major virtual asset exchanges in South Korea, including Upbit, Bithumb, Coinone, Korbit, and Gopax, will review the reports submitted by users. The results will then be forwarded to the FIU, which will assess the status of the operator and determine whether further action, such as notifying investigative agencies, is warranted.
The goal of this initiative is to identify both domestic and foreign virtual asset business operators targeting Korean citizens without complying with relevant regulations. DAXA emphasizes that it aims to address any “undeclared business activities” and take necessary measures to ensure compliance.
Reports can be submitted through DAXA’s tip email address, requiring comprehensive information related to the business, reasons for suspicion, and evidence of undeclared business activities.
This development aligns with South Korea’s ongoing efforts to strengthen its involvement in the cryptocurrency industry. Notably, on November 14, the Democratic Party of South Korea mandated that parliamentary candidates disclose any personal crypto holdings for transparency purposes.
In October, the South Korean Financial Supervisory Service (FSS) announced preparations for regulations to supplement the Virtual Asset Users Protection Act, passed earlier in 2023. The FSS anticipates implementing these regulations by January 2024.
Additionally, on November 23, South Korea’s central bank unveiled plans to invite 100,000 citizens to participate in testing its upcoming central bank digital currency (CBDC) in 2024. These collective efforts underscore South Korea’s commitment to fostering a transparent and regulated crypto ecosystem.
