South Korea’s Financial Intelligence Unit (FIU) has blocked 14 unregistered cryptocurrency exchanges, including prominent platforms like KuCoin and MEXC, from operating within its borders. This decisive move aims to safeguard its financial ecosystem, curb illicit activities and protect investors in a rapidly growing digital market.
Regulatory Action and Implementation
On April 11, 2025, the FIU mandated the removal of 14 overseas crypto exchange apps from Apple’s App Store, following a similar purge of 17 apps from Google Play on March 26. These platforms were flagged as “unreported foreign virtual asset operators” for failing to register as Virtual Asset Service Providers (VASPs) under the Specific Financial Information Act.
The FIU, in collaboration with the Financial Services Commission (FSC) and the Korea Communications Standards Commission, enforced these restrictions to prevent unauthorized services targeting local users. Non-compliance carries severe penalties, including up to five years of imprisonment, or fines of approximately $34,150.
The FSC emphasized that unregistered exchanges pose risks like money laundering, prompting this crackdown to enforce anti-money laundering (AML) protocols. By restricting app access, the FIU aims to limit new installations and updates, effectively curbing these platforms’ reach in South Korea.
South Korea’s Regulatory Pattern
The FIU’s actions have caused a stir throughout South Korea’s crypto market, which boasts 16 million users—nearly a third of the population. Investors using these platforms face uncertainty, with warnings to withdraw funds to avoid losses. The crackdown reinforces trust in regulated exchanges but may push some users toward workarounds like VPNs, as seen in similar global restrictions.
This follows a pattern of stringent oversight. For instance, Upbit, one of South Korea’s largest exchanges, was sanctioned for a KYC violation. The report confirmed that South Korea’s FIU uncovered potential violations of KYC regulations on Upbit’s platform, involving between 500,000 and 600,000 cases.
In March 2025, the FIU targeted KCEX, among other unregistered foreign exchanges, blocking its app from Google Play and Apple’s App Store for failing to comply with VASP registration requirements. These measures align with South Korea’s broader push for regulatory clarity, including plans to allow institutional crypto trading and strengthen AML frameworks, which balances innovation with investor protection in a dynamic market.
