South Korea's Financial Intelligence Analysis Unit (FIU) Is Cracking Down on Cryptocurrency Exchanges

South Korea's Financial Intelligence Analysis Unit (FIU) is significantly increasing its enforcement on cryptocurrency exchanges, both within the country and operating internationally.

South Korea’s Financial Intelligence Analysis Unit (FIU) is intensifying its crackdown on cryptocurrency exchanges operating within and outside the country.

As reported by Block Mena, the FIU is putting several trading platforms under scrutiny for potential violations of regulatory compliance. This move showcases the unit’s hardline stance against crypto-related service providers.

The FIU is also targeting major unregistered overseas exchanges, including BitMEX and CoinW, for offenses linked to the country’s Specific Financial Transaction Information Reporting and Use Act.

Authorities are planning to block access to these non-compliant platforms for Korean users, aiming to curb cryptocurrency trading in domains lacking the necessary legal framework. Another foreign exchange was also reportedly targeted in this action.

This development has raised concerns among market participants regarding restricted access to widely used trading platforms.

Upbit, one of the largest cryptocurrency exchanges in South Korea, has also faced regulatory hurdles. The FIU reportedly issued a suspension notice against Upbit in January for alleged breaches of Know Your Customer (KYC) regulations.

Moreover, Dunamu, the exchange’s partner firm which manages Upbit’s operations in South Korea, received a three-month suspension notice in late February due to a violation of the obligation to prevent transactions with unnotified virtual asset operators.

In a separate development, South Korean prosecutors raided the offices of Bithumb on March 20th following allegations of significant financial misconduct by former CEO Kim Dae-sik.

Prosecutors suspect Kim embezzled a large sum of funds from the exchange, including a 3 billion Korean won (more than $2 million) apartment lease deposit, to invest in real estate.

The funds were allegedly used to purchase an apartment in Gangnam, Seoul, and a villa on Jeju Island.

Earlier this month, the Democratic Party was asked to urge the Bank of Korea to discuss the potential benefits of a strategic Bitcoin reserve, an idea U.S. President Donald Trump’s administration reportedly mulled in 2019.

However, the central bank quickly shot down the idea due to the cryptocurrency’s volatility. Bitcoin surged to an all-time high of $109,114.88 two months ago and is currently trading at $84,106.10, down 22% from those levels.