FSC Reports For 16 Non-Reported Overseas Virtual Asset Exchanges
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Financial Services Commission (FSC)
The Financial Intelligence Unit (FIU) under the Financial Services Commission reported on the 18th of August that it had notified investigating agencies of 16 overseas virtual asset operators suspected of violating the Specific Financial Information Act (Special Act) by failing to register transactions with Koreans. According to the Special Act, the 16 operators caught were, KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.
Business entities associated with virtual assets must meet the regulatory requirements of the FIU under the Special Act. Certification of the information security management system (ISMS) is part of this process. Non-reporting can result in a five-year prison sentence or a fine of not more than 50 million won. The business is also prohibited from operating in the crypto sector for another five years. Foreign as well as local enterprises are subject to these rules.
16 Firms Were Operating Unauthorized And Unregistered
Before the Special Act's reporting deadline in July last year, the FIU informed these foreign companies to report their activities. However, the owners have been allegedly operating unauthorized and unregistered. The FIU claims that these companies hosted events targeting Korean clients and offered services on their websites.
An FIU official said,
"Unreported virtual asset operators may be exposed to risks such as leakage of personal information and hacking because the information security management system (ISMS), which is a reporting requirement under the Special Act, is not properly equipped, and there is a risk of being misused as a money laundering route."