South Korean regulators are intensifying their crackdown on digital asset firms by requesting 14 apps from Apple be blocked domestically. According to a report made public on Monday, the apps belong to unreported foreign crypto operators.
The banned exchanges allegedly operated as unregistered overseas virtual asset operators. Crypto exchanges KuCoin and MEXC are among the firms targeted by the regulator, and domestic access to their apps has been blocked since April 11.
South Korea tightens regulations on unreported virtual asset operators
Foreign virtual asset business operators who intend to operate in South Korea are required to report to the Financial Intelligence Unit (FIU) under the Act on Reporting and Use of Specific Financial Transaction Information.
FIU noted that unreported business activities are subject to criminal punishment. The regulator has been targeting overseas unreported virtual asset operators conducting domestic business activities without reporting (16 companies in 2022, 6 companies in 2023) while blocking domestic access through internet sites and mobile phone apps.
South Korea has been moving to block crypto providers that are operating illegally. The move to block apps on the Apple Store follows a similar action by Google Play on March 26, which restricted access to several unregistered exchanges. KuCoin and MEXC were also among the platforms targeted in Google’s crackdown. The FSC has published a list of 22 unregistered platforms operating in South Korea, with 17 already blocked on Google Play.
The FSC report states that users will no longer be able to download the apps from the Apple Store, and existing users will be unable to update them. The report also highlights that operating without proper registration is considered a criminal offense, with penalties including up to five years in prison and fines of up to 50 million won ($35,200).
At the end of March, South Korean publication Hankyung reported that the FIU and the FSC were considering sanctions against crypto exchanges operating in the country without registration with local regulators. The sanctions included blocking access to the companies’ apps.
In South Korea, crypto sales, brokerage, management, and storage operators must report to the FIU. Failure to comply with registration and reports is subject to penalties and sanctions.
Crypto adoption in South Korea hits 30% of the population, driving regulatory action
The new sanctions arrive as cryptocurrency usage in South Korea nears a “saturation point.” By March 31, the country’s number of crypto exchange users had exceeded 16 million, representing more than 30% of the population. Industry experts project that this figure could surpass 20 million by the end of 2025.
Moving forward, FIU has committed to continuing to block domestic access through mobile applications (apps) and Internet sites of overseas unreported virtual asset operators. This initiative aims to mitigate money laundering risks and user damage in consultation with relevant organizations.
With almost a third of South Korea’s population engaged in crypto trading, institutional involvement could further boost market liquidity and growth. FSC Vice Chairman Kim So-young acknowledged the increasing pace of international crypto adoption, particularly in response to policy shifts in the US.
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