Summary:
- One of Korea’s “Big Four” Upbit announced limited operations with a set of crypto exchanges.
- The exchange said prohibited transactions include deposits and withdrawals to 16 foreign-based platforms.
- Authorities revealed plans to crack down on these same crypto exchanges last week.
- A special intelligence unit under the FSC said the 16 platforms were operating unregistered crypto businesses in the country.
Major South Korean-based crypto exchange Upbit released a notice on Thursday informing users that certain transactions to 16 foreign-based exchanges would be limited in compliance with the FSC’s mandate to go after unregistered crypto businesses.
According to Thursday’s update from Upbit, the prohibition on transactions to these 16 exchanges includes token deposits and withdrawals regardless of the amount. Furthermore, the restriction is scheduled to kick in on Sunday, August 28, 2022.
EthereumWorldNews reported last week that the Korea Financial Intelligence Unit (KoFIU) under the Financial Services Commission (FSC) flagged 16 digital asset exchanges for running undeclared and unregistered business operations.&
The special FSC unit also revealed that foreign virtual asset service providers (VASPs) were instructed to apply for registration back in July 2021. However, some 16 exchanges failed to comply, per comments from KoFIU officials.&
According to the watchdog, the 16 platforms in question include KuCoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, CoinW, CoinEX, AAX, ZoomEX, Poloniex, BTCEX, BTCC, DigiFinex, and Pionex.
KoFIU’s statement on August 18 revealed that the agency planned to pursue actions against the 16 according to the provisions of the Specific Financial Information Act.
Upbit’s Decision Could Spur Other Korean Exchanges Towards Similar Restrictions
At press time, Upbit is one of the largest Korean-based exchanges in terms of transaction and trading volume. The exchange is currently a market leader in Korea and holds the role of a major stakeholder.
Indeed, Upbit’s decision to comply with the FSC’s mandate could put pressure on other exchanges in South Korea to do the same. Local exchanges may also be inclined to take similar actions faster in the future as authorities intensify regulatory efforts following Terra’s $40 billion crash.
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