[NEWS] South Korean regulators accept information on unregistered cryptocurrency businesses to step up crackdown

The Korea Digital Asset Exchange Association (DAXA) has started accepting information on unregistered cryptocurrency (virtual currency) businesses in cooperation with the Korea Financial Intelligence Unit (FIU). On the 4th, Korean media NEWS1 reported.

DAXA has five of Korea's largest cryptocurrency exchanges, Bithumb, Upbit, Korbit, Coinone, and Gopax, as members.

The businesses that are the subject of information provision are cryptocurrency businesses in Korea and abroad that do not report under Article 7 of the Specified Financial Information Act and operate unregistered businesses targeting Koreans.

The information that DAXA accepts includes "business-related information," "evidence of unregistered business activities," and "suspected unregistered businesses." Based on the information received, it will verify it and report the results to the FIU. The FIU will then determine whether it is an unregistered cryptocurrency business and will notify the business after responding to the results to DAXA.

A DAXA official said, "If the relevant business operator continues to operate without registration, the FIU will take necessary measures, such as reporting to an investigative agency."

Korean cryptocurrency exchanges struggling

Recently, the price of cryptocurrencies, including Bitcoin (BTC), has risen significantly, but Korean cryptocurrency exchanges are struggling. The background to this seems to be the collapse of cryptocurrency exchange FTX last year and the "Terra Luna incident." Since these incidents occurred, the recovery of trading volume has been slow, and performance has been sluggish across the board.

Upbit, one of the top five exchanges in Korea, recorded net profit of 29.5 billion won (approximately 3.3 billion yen) in the third quarter, down 81.6% from the same period last year. Sales for the same period were down 29% to 193 billion won (approximately 21.6 billion yen).

The situation of the four exchanges other than Upbit seems to be worsening further. For example, Bithumb reported third-quarter revenue of 32.5 billion won (approximately JPY 3.7 billion), down 53.1% from the same period last year. Operating losses were 10.6 billion won (approximately JPY 1.2 billion).

Behind this, unregistered cryptocurrency businesses are repeatedly committing crimes such as fraud using cryptocurrencies, which has become a major problem in South Korea. DAXA believes that these unregistered businesses are fueling suspicion of cryptocurrencies, and will begin cleaning up the cryptocurrency industry in South Korea.

Reference:Press
Image: Shutterstock

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