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South Korea urges public reporting on unlicensed crypto exchanges

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The South Korean financial regulators have announced a program for the public to report unlicensed cryptocurrency exchanges operating within the country.

In an announcement on Dec. 4, South Korea’s financial regulators tasked users with reporting any unlicensed crypto exchanges operating in the region.

The program to report unlicensed crypto exchanges is a joint effort between The Digital Asset Exchange Association (DAXA) and the Financial Intelligence Unit (FIU). These two organizations are working together to ensure the safety and security of South Korean crypto users.

The DAXA comprises five major virtual asset exchanges operating in South Korea, including some of the largest platforms like Upbit, Bithumb, Coinone, Korbit, and Gopax.

The South Korean regulators are seeking to identify crypto exchanges that are operating without a license and targeting Korean citizens, in violation of Article 7 of the Specific Financial Information Act.

The DAXA will first review the reports and then forward them to the FIU for further review. The FIU will then determine the status of the operator and whether any further action is required.

An official from DAXA has warned that if unlicensed crypto exchanges continue to operate in South Korea, the FIU will take appropriate action to stop their activities. This may include notifying the relevant law enforcement agency to investigate the exchanges.

Users can send a report to the DAXA through a dedicated email address, providing as much information as possible about the suspicious business, including the reasons for suspicion and any evidence of undeclared business activities.

The increased focus on unlicensed crypto exchanges in South Korea is part of a broader trend of increased involvement in the crypto industry by the South Korean government.

The Democratic Party of South Korea announced on Nov. 14 that its candidates for parliament must disclose their crypto holdings to  promote transparency.

The South Korean Financial Supervisory Service (FSS) announced the commencement of developing regulations to supplement the recently passed Virtual Asset Users Protection Act.

The  FSS expects the regulations supplementing the Virtual Asset Users Protection Act to be in place by January 2024.

The Bank of Korea announced on Nov. 23 a pilot program for its CBDC, which will involve 100,000 citizens in 2024.

 

Read also: SBI Holdings partners with Circle for USDC circulation and web3 services

 

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