Domestic financial authorities have established a period for users to report unlicensed cryptocurrency exchanges operating in the country.
According to a December 4 update, this latest initiative is a joint effort between the Digital Asset Exchange Association (DAXA) and the Korea Financial Intelligence Unit (FIU). DAXA encompasses the five major domestic virtual asset exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax.
The primary purpose is to identify domestic and foreign virtual asset business operators targeting Korean citizens without complying with Article 7 of the Specific Financial Information Act.
The process of processing these reports includes an initial review by DAXA and detailed investigation by the FIU. The FIU then forwards its findings back to DAXA to determine the operational status of the reported entity and determine any necessary actions.
DAXA officials emphasized the seriousness of the situation, saying that if operators continue their undeclared business activities, the FIU will take appropriate action, which could include involving investigative agencies.
DAXA has provided a dedicated tip email address to facilitate this reporting process. They encourage the public to submit detailed information about suspicious businesses, including reasons for suspicion and evidence of undeclared activity.
The move is part of South Korea’s broader strategy to strengthen regulatory oversight of the cryptocurrency sector. On November 14, the Democratic Party of Korea requested that candidates for National Assembly members disclose their cryptocurrency holdings to increase transparency in the political world.
The Korean digital asset market also showed significant growth in 2023. As reported in early October, total capitalization of the market reached $21.1 billion in the first half of 2023. This growth was driven by a significant 82% increase in the virtual marketplace operator’s operating profit, totaling $168 million.
Meanwhile, on November 23, the Bank of Korea announced plans to involve 100,000 citizens in testing a central bank digital currency (CBDC) to be launched in 2024.