South Korea's FIU Moves to Block Access to Two Unregistered Crypto Platforms as Illegal Operator Count Rises to 47

South Korean Financial Intelligence Unit Takes Action Against Unregistered Cryptocurrency Platforms

The South Korean Financial Intelligence Unit (FIU) has initiated measures to restrict online access to two unregistered cryptocurrency platforms—TetherMax and SuperTrust—while directing investigations into three entities for purported infractions against the nation's financial regulations. This action, reported on October 30 by the Yonhap News Agency, follows an alert from the Digital Asset Exchange Alliance (DAXA), which flagged TetherMax, SuperTrust, and Aegis Ventures as potentially operating without official registration as virtual asset service providers.

Notably, Aegis Ventures was not included in the request to block access due to its lack of a standalone website or mobile application. Still, all three companies now face inquiries over their unauthorized operations. With this latest action, the total number of unregistered cryptocurrency enterprises under FIU scrutiny has surged to 47.

Regulatory Framework and Penalties

Under the Specific Financial Information Act, any entity offering cryptocurrency services to residents in South Korea must be registered with the FIU—a rule that impacts both domestic firms and international platforms that cater to South Korean users regardless of their base location. Violations of this regulation can lead to severe penalties, including a prison sentence of up to five years or fines reaching 50 million won.

The request for access restrictions is currently pending approval from the communications review authority, tasked with determining the implementation of the proposed measures. This follows a trend where South Korean regulators have enforced similar access barriers against several foreign exchanges that operated without necessary compliance.

Recent Developments in Regulatory Actions

Earlier this month, the FIU restricted access to 27 cryptocurrency websites, including those run by KuCoin, MEXC, and BingX, after conducting regulatory assessments earlier in October. This move was part of ongoing efforts to manage the growing number of unregistered operators, which increased from a reported 44 to 47 following reports of the latest offenders.

Regulatory scrutiny has intensified around unregistered crypto businesses, especially concerning the fees they impose. The FIU found that businesses lacking registration charged average trading fees substantially higher than mainstream South Korean exchanges—often 62 times more than the typical fee of around 0.16% charged by established, licensed exchanges. There are also concerns over unregistered operators' potential engagement in money laundering, as they operate beyond the oversight that comes with proper registration.

Public Warnings and Future Regulatory Enhancements

Authorities previously identified approximately 40 unregistered businesses and issued warnings to the public regarding fraud, hacking threats, and data privacy risks. These unregulated operators have been known to reach out to Korean customers via social media platforms like Telegram and KakaoTalk, often promoting private exchanges involving stablecoins and fiat transactions.

In an effort to tighten control over cryptocurrency activities, South Korea has moved to enhance its regulatory framework surrounding these operations throughout the year. Changes made in August included stricter requirements for businesses handling overseas cryptocurrency transactions, necessitating detailed verification of transfer information. Meanwhile, proposed legislative amendments aim to endow the FIU with direct investigative powers, allowing it to examine unregistered crypto activities and expedite the process of addressing suspected violations. This effort follows a disappointing response from law enforcement, which led to the suspension of investigations into many of the referrals previously made by the FIU.

With these actions, the FIU seeks to boost transparency and safety regarding virtual asset services, promoting public access to registries that differentiate between compliant and non-compliant operators.