South Korea’s Financial Intelligence Unit (FIU) has restricted access to 17 foreign crypto exchange applications on Google Play due to their lack of appropriate registration, as announced on March 26.
Among the exchanges affected are prominent names like KuCoin, MEXC, Phemex, XT, CoinEx, BitMart, and Poloniex.
The officials stated that South Korean cryptocurrency users can no longer download these apps, and those who have them installed will not receive future updates.
This action is aimed at minimizing risks related to money laundering and safeguarding users from unregulated platforms.
Under South Korean legislation, all cryptocurrency exchanges must register with regulatory bodies before they can offer their services. This requirement also extends to foreign exchanges if they provide Korean-language support, promote themselves to Korean users, or facilitate transactions in Korean won.
The FIU noted that unregistered entities meeting any of these criteria are viewed as conducting business within South Korea.
Moreover, the agency cautioned that the operators of these unregistered exchanges could face severe legal repercussions, including a prison sentence of up to five years or fines reaching 50 million won (approximately $34,150).
To enhance enforcement efforts, the FIU is collaborating with Apple Korea and the Korea Communications Standards Commission to limit access to Apple’s App Store and block related websites.
The agency also provides a public database of registered exchanges, allowing users to verify whether their chosen platform is compliant. The FIU recommends that users withdraw their funds immediately if an exchange is not included in the list.
Cryptocurrency Growth in South Korea
This regulatory crackdown coincides with a significant increase in cryptocurrency participation within the country.
A report from a local media source revealed that lawmaker Ahn Do-jae disclosed that over 9.6 million South Koreans had accounts with the five major licensed exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—by the end of the previous year. This number reflects a substantial rise of 52.6% from the prior year.
The total value of crypto holdings on these platforms now surpasses 100 trillion won (approximately $68 billion), indicating strong market confidence.
Interestingly, one of the fastest-growing demographics includes older investors. The number of individuals in their 50s increased to 1.75 million, while those over 60 rose from 371,800 to 636,700—a remarkable increase of over 52%.
Additionally, wealth concentration among older users is striking. Out of 9,135 users holding more than 1 billion won in digital assets, more than half are aged 50 or older. These investors possess an average of 2.15 billion won in cryptocurrency, highlighting the evolving demographics of South Korea’s crypto elite.
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