South Korea to Block 27 Crypto Exchanges, Including Bitmart and KuCoin

Regulators in the country are tightening existing restrictions on mobile apps and websites, targeting unregistered exchanges before investors report losses.

South Korea is blocking access to 27 websites of unregistered cryptocurrency exchanges, including KuCoin, BitMart and MEXC, expanding its crackdown on foreign trading platforms beyond their mobile apps.

The Korea Communications Standards Commission approved the restrictions after a review on October 6 and 7, the country's Financial Intelligence Unit (FIU) announced on Tuesday. Websites operating from abroad will be blocked, while those operating domestically will face service termination, FIU noted.

The move closes another avenue for South Korean investors to access unregistered exchanges after authorities last year restricted access to their mobile apps at Google and Apple. Regulators can now seek website blocks as soon as they detect unregistered activity, without waiting for a court order or evidence that customers have lost money.

The FIU did not specify how long the restrictions would last or set a deadline for exchanges to register. However, any exchange that wants to legally operate in the country and serve South Korean customers must register with the FIU and meet the country's security and anti-money laundering (AML) requirements.

"We respect applicable laws and regulations across jurisdictions and continuously strengthen our compliance framework in response to evolving regulatory requirements," said a KuCoin spokesperson.

"User assets remain safe and secure and we will communicate any further updates through our official channels."

BitMart, Phemex and MEXC did not immediately respond to CoinDesk's request for comment.

South Korea's proposed digital asset constitution, which has yet to come into force, lays the groundwork for a legal framework for digital assets, including issuance, trading, custody and supervision. The country's Financial Services Commission and Financial Supervisory Service announced new rules in April, eliminating optional exchanges that allowed users to bypass holding periods.

The FIU said it has referred 44 unregistered operators to inspectors and is looking to further block websites that are re-opening with different addresses. Currently, only 28 virtual asset service providers are registered with the regulator.

The financial watchdog also warned that traders using unauthorized platforms may face difficulties in recovering their funds. FIU said it will work with the Digital Asset EXchange Alliance (DAXA), an industry association, to help affected customers withdraw funds where access restrictions are causing problems. He also asked investors to check whether their stock exchange is registered or not and to withdraw assets from unauthorized operators.

South Korean investors have been gradually moving large amounts of digital currency out of the country for months due to stricter rules, with an estimated $110 billion leaving domestic exchanges by 2025.

Diversified RWA stablecoins maintain a 5-7% return on real credit as crypto funding drops to 4%. GENIUS increases performance off-chain. TAM increases to $4 billion in 3 years.