The Financial Services Commission in South Korea is investigating 16 cryptocurrency exchanges for violating the Specific Financial Information Act. The FSC has alleged that these exchanges were operating as non-reporting entities.
Furthermore, they conducted they actively conducted sales activities on their websites through attractive offers without reporting to the South Korean government. On August 18, the Financial Intelligence Unit (FIU), working under FSC, names those 16 exchanges for violating the law.
This included some of the top exchanges operating in the country such as KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.
The Special Act Rules In South Korea
According to the Special Act, any business entity associated with virtual assets, need to meet the regulatory requirements of the FIU. This includes getting the information security management system (ISMS) certification.
In the case of non-reporting, a business can face 5-year imprisonment or a fine not exceeding 50 million won. Furthermore, the business cannot operate in the crypto sector for another five years. These rules are applicable to both local as well as foreign businesses.
