Google Play Blocks 17 Crypto Exchanges in South Korea

Google Play has implemented access restrictions on 17 unregistered overseas cryptocurrency exchanges that cater to users in South Korea. This action was taken at the request of the country’s regulators, specifically the Financial Intelligence Unit (FIU) of the South Korean Financial Services Commission (FSC). The FIU had previously indicated that it was considering sanctions against operators that did not report to the relevant authorities, as required by the country’s Specified Financial Information Act.

The FIU coordinated with the Korea Communications Standards Commission (KCSC), the regulator in charge of the internet, to block access to these exchanges. By March 26, the FSC published a list of 22 unregistered platforms, with 17 of them being blocked from the google Play store. This move restricts new downloads and updates for the affected apps, effectively limiting user access. The exchanges affected by this restriction include KuCoin, mexc, Phemex, XT.com, Biture, CoinW, CoinEX, ZoomEX, Poloniex, BTCC, DigiFinex, Pionex, Blofin, Apex Pro, CoinCatch, WEEX, and BitMart.

The FSC expects that this action will help prevent money laundering acts using crypto assets and potential future damages to local users. The FIU is also coordinating with Apple Korea and the KCSC to block internet and App Store access to these exchange platforms. KuCoin, one of the affected exchanges, had previously stated that it was monitoring regulatory developments in all jurisdictions, including South Korea, and emphasized the importance of compliance for the sustainable growth of the crypto industry. However, the exchange did not provide detailed information on its plans for South Korea.

This move by Google Play is part of a broader effort by South Korean regulators to increase scrutiny of crypto trading platforms. On March 20, Seoul’s Southern District Prosecutors’ Office raided Bithumb offices in the country, suspecting financial misconduct involving the exchange’s former CEO. Prosecutors suspected Bithumb board member Kim Dae-sik of using company funds to purchase a personal apartment. Additionally, a report surfaced alleging that intermediaries were paid to list token projects on Bithumb and Upbit. In response to the report, Upbit demanded the release of the identities of crypto projects that claimed to have paid intermediaries to be listed.

Ask Aime: What impact will Google Play's restrictions have on cryptocurrency exchanges in South Korea?

The blocking of these unregistered exchanges underscores South Korea's stringent regulatory stance on cryptocurrency activities. The FIU's action is part of a broader effort to ensure that all cryptocurrency exchanges operating within the country comply with local regulations. By enforcing these restrictions, South Korea aims to safeguard its financial system and protect investors from the potential risks of dealing with unregistered exchanges.

The impact of this move is significant for users of the affected exchanges, as they will no longer be able to access or update these applications through the Google Play Store. This restriction is likely to prompt these exchanges to seek proper registration in South Korea or to find alternative means of reaching their user base in the region. The FIU's proactive approach in collaborating with tech giants like Google to enforce regulatory compliance sets a precedent for other countries grappling with the challenges of regulating the cryptocurrency industry.

The blocking of these unregistered exchanges also highlights the growing scrutiny of cryptocurrency activities globally. As digital currencies gain mainstream acceptance, regulatory bodies are increasingly focusing on ensuring that all participants in the ecosystem adhere to legal and financial standards. This move by South Korea is a clear indication of the government's commitment to maintaining a secure and transparent financial environment, even as it embraces the potential benefits of blockchain technology and cryptocurrencies.