Foreign virtual asset services providers (VASPs), including cryptocurrency exchanges operating in South Korea, have until September 24th, 2021, to register with the local regulator. Otherwise, they risk being blocked from providing services to Koreans, said the Financial Services Commission.
Crypto Exchanges Might be Blocked in Korea?
As reported by CryptoPotato earlier this year, the Asian country implemented a new rule suggesting hefty penalty standards and fines for all VASPs that fail to report suspicious transactions and keep relevant data. The legislation came into effect on March 25th, but such companies had a gratis period, which will end in two months.
Now, the Financial Services Commission (FSC), through its Korean Financial Intelligence Unit (KoFIU), stated that VASPs have until September 24th, 2021, to register.
Consequently, the watchdog has sent out notices to 27 foreign businesses reminding them about this obligation.
“The Act requires VASPs to register with the KoFIU as the law equally applies to foreign VASPs that conduct activities outside Korea but have domestic consequences within Korea.
Thus, if any VASPs conduct business operations targeting Koreans, they are required to register with the KoFIU and comply with requirements under the Act regarding their business operations targeting Koreans.” – reads the statement.
In case any of these organizations fail to register with the regulator, they “shall cease their business operation targeting Koreans from September 25th, 2021.” If they continue operating, they will be subject to penalties, including up to five years of imprisonment or a maximum fine of KRW50 million (approx. $44,000).
Small Exchanges to Sue the Government?
South Korea, which has enhanced its regulatory grip on the industry lately, has specifically targetted cryptocurrency exchanges. Some smaller trading venues, though, reportedly decided to act as they believe the legislation could have a devastating effect on their business operations.
As such, they contemplated taking legal actions against the government because it has urged local banks to distance themselves from most exchanges, except the giants – UPbit, Bithumb, Coinone, and Korbit.