Korean Watchdog Wins Approval to Block KuCoin, MEXC and 25 More Unregistered Crypto Sites

Introduction

South Korea’s Financial Services Commission (FSC) has taken a decisive step in its ongoing crackdown on unregistered cryptocurrency platforms. In a recent ruling, the regulator approved the blocking of 27 foreign‑run exchange websites—among them KuCoin, MEXC, BitMart, Phemex and BingX—extending its enforcement reach from mobile app stores to the broader internet. The move signals a shift toward pre‑emptive action: the Financial Intelligence Unit (FIU) will now seek blocks as soon as it detects unregistered activity, without waiting for victim complaints or court rulings.

From App Stores to Full‑Web Blocks

Previously, Korean authorities focused on preventing the download and update of unregistered exchange apps through Apple’s and Google’s app stores. The latest decision broadens that scope to cover the exchanges’ public websites. For overseas operators, the block will simply cut off access for Korean users; for domestically hosted sites, the FSC may order outright termination of service. While the exact start date for the blocks has not been announced, the FIU has warned users of the affected platforms to withdraw their assets immediately.

Why the Crackdown Matters

Under Korea’s Act on Reporting and Using Specified Financial Transaction Information, any entity offering crypto services to Korean residents must register with the FIU and obtain an ISMS security certification. Failure to comply can result in up to five years in prison or a fine of 50 million won. The FIU currently lists 28 registered virtual‑asset service providers and has reported 44 unregistered operators to investigative agencies.

A joint investigation by the Digital Asset eXchange Alliance (DAXA) and registered firms earlier this year found that unregistered platforms charge trading fees ranging from 1.5 % to 10 %, far higher than the roughly 0.16 % average on Korea’s five licensed won‑trading exchanges. The higher fees, coupled with the lack of consumer protections, have fueled the regulator’s resolve to eliminate these shadow services.

Enforcement Mechanics and User Guidance

The FIU’s new policy allows it to request a block the moment it identifies an unregistered exchange operating a Korean‑language site, marketing to Korean users, or accepting won payments. It will also monitor for replacement domains that operators might launch to evade the ban, submitting those for review as they appear.

Customers of the listed exchanges have been instructed to withdraw their holdings promptly. DAXA has pledged to assist users with the withdrawal process, working with the exchanges to facilitate safe asset transfers. Additionally, the regulator warned that sharing referral links for unregistered platforms could be construed as aiding an illegal business, exposing the referrer to criminal liability.

Looking Ahead

The website‑blocking measure arrives as the FSC contemplates broader reforms to exchange supervision, including potential changes to market‑making rules. By targeting both app stores and websites, Korean authorities are building a layered defense aimed at keeping unregistered crypto services out of the market before they can cause harm.

--- Practical Takeaway: If you reside in South Korea and have accounts on any of the 27 listed exchanges, initiate a full withdrawal of your assets now. Keep an eye on official FSC and FIU announcements for the exact rollout date of the blocks, and avoid sharing referral links that could expose you to legal risk.