South Korean authorities urge public disclosure of unlicensed cryptocurrency exchanges
Financial authorities in South Korea have introduced a new measure to combat unlicensed cryptocurrency exchanges operating within the country. The initiative is a joint effort between the Digital Asset Exchange Association (DAXA) and South Korea’s Financial Intelligence Unit (FIU). DAXA comprises of five major virtual asset exchanges in the country: Upbit, Bithumb, Coinone, Korbit, and Gopax.
The main objective of this measure is to identify both domestic and foreign virtual asset businesses that are targeting Korean citizens without complying with article 7 of the Specific Financial Information Act. The process involves an initial review by DAXA, followed by a detailed examination by the FIU. The FIU will then provide its findings to DAXA, who will determine the operational status of the reported entities and decide on the appropriate actions.
An official from DAXA emphasized the seriousness of the situation, stating that if operators continue to engage in undeclared business activities, the FIU will take necessary measures, which may involve investigative agencies. To facilitate the reporting process, DAXA has established a dedicated tip email address. The public is encouraged to provide detailed information about suspicious businesses, including reasons for suspicion and any evidence of undeclared activities.
This measure is part of South Korea’s broader strategy to enhance regulatory oversight in the cryptocurrency sector. In a significant development on November 14, the Democratic Party of South Korea mandated its parliamentary candidates to disclose their cryptocurrency holdings, aiming to promote transparency in political circles.
The South Korean digital asset market has experienced substantial growth in 2023. As reported in October, the market’s total capitalization reached $21.1 billion in the first half of 2023. This growth was accompanied by an impressive 82% increase in operating profits for virtual marketplace operators, totaling $168 million.
Furthermore, on November 23, South Korea’s central bank announced plans to involve 100,000 citizens in testing its upcoming central bank digital currency (CBDC) in 2024.
