
South Korea's FIU referred 40 unregistered crypto operators to police. Only 28 exchanges hold proper registration. Identity checks expand to all transactions from August.
South Korea's Financial Intelligence Unit has referred roughly 40 unregistered virtual asset service providers to the police for investigation. The move is the latest in Seoul's push to tighten oversight of crypto firms operating in the country.
Under South Korean law, all crypto exchanges must obtain ISMS certification and register with the FIU before offering services. Only 28 entities currently hold that registration, according to The Chosun Daily.
The FIU identified several tactics offshore exchanges used to attract local clients. Some advertised on Telegram and KakaoTalk while keeping their operations abroad. Private money changers converted stablecoins into Korean won for tourists, students, and foreign workers. Content creators received payments to promote foreign exchanges to Korean audiences.
The agency stressed that unregistered platforms do not fall under the legal protections South Korea's laws provide.
The referrals are part of a broader campaign aligned with FATF standards. Lee Hyung-joo, the FIU Director, attended the FATF's 34th plenary in Paris and called on member states to scrap transaction thresholds under the crypto Travel Rule. South Korea plans to require identity checks for all crypto transactions starting in August.
Currently, identity verification is mandatory only for transactions above 1 million won, roughly $730. Lee argued that inconsistent licensing standards across jurisdictions create regulatory arbitrage, weakening anti-money laundering enforcement.
South Korea's crypto regulatory actions have expanded through 2026. Authorities previously launched criminal proceedings against an individual running pump-and-dump schemes. Government agencies also stepped up cooperation with banks and credit card firms to block cross-border illegal transactions.
For traders and exchanges operating in South Korea, the message is clear: registration is not optional, and the window for unlicensed activity is closing. The FIU's referral list likely includes names that will surface as police investigations progress.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.