Regulation News

South Korea threatens operators of unregistered crypto exchanges with jail time

TL;DR Breakdown

  • Authorities in Korea warns of clampdown on exchange firms again.
  • Says unregistered crypto firm risks 5 years jail term or $43,500 fine.
  • Exchange firms revolt against stringent crypto regulation in South Korea.

South Korea has again warned unregistered crypto firms that they risk paying heavy fines or even bagging jail terms if they don’t voluntarily get registered by the 24th of September.

Reports have it that the country’s constitution under the specific Financial Information Act can be punished with five years imprisonment sentence or a fine of up 50 million Won ( $43,500) if they operate without getting registered.

Authorities in South Korea sounded the warning again on Thursday, noting that it affects both local crypto firms and foreign exchange firms operating in the South Korean market.

They also encouraged residents in the country to check to see if their exchange is registered by September 25 to avoid any related penalties.

The announcement comes against the backdrop of a crackdown on crypto regulation firms across the world. Earlier this week, the European Union announced plans to crack down on the sending and receiving of cryptocurrency in the hope of limiting money laundering. The US has also picked a quarrel with the crypto world recently, among many other crackdowns faced by cryptocurrencies.

However, both regulators in South Korea and exchange firms have been getting it right with regulation as exchange firms fought back at a point and threatened to sue the government over stringent regulatory measures metered on them.

Exchange firms in South Korea to sue government

Crypto exchange firms considered revolting in South Korea and sue the government to court over stiff and unfavorable regulations which they have been subjected to comply with.

Reports went viral that they were seriously planning to take legal actions against the government.

The most recent regulation causing the stir of a lawsuit is the one that will require them to have a real-name account at a local bank by September. It appears that regulation would push too many smaller trading platforms out of business, so they opt to file a lawsuit.

Exchanges have been making frantic efforts to meet the criteria to get registered in the country. Many exchanges engaged in mass delisting of altcoins to set up their chances of remaining afloat by September 24.

All these actions with no headway insight for many small crypto firms made them consider revolting and dragging the government to court to guarantee their survival beyond September.

This post was last modified on July 23, 2021 12:25 am

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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