South Korea Blocks 27 Unregistered Crypto Exchanges in Sweeping Regulatory Expansion

South Korea Intensifies Crypto Regulatory Crackdown

South Korea’s Financial Intelligence Unit (FIU) has approved measures to block domestic access to 27 websites operated by unregistered cryptocurrency exchanges and virtual asset service providers. The decision, announced Tuesday, follows reviews conducted by the Korea Media and Communications Standards Commission on October 6 and 7. The action targets platforms that have not registered under South Korea’s anti-money laundering legislation, specifically the Act on Reporting and Using Specified Financial Transaction Information.

Major exchanges affected by the blocks include KuCoin, MEXC, Phemex, and Bitrue, along with CoinW, BTCC, BitMart, BingX, and DigiFinex among the broader list. The FIU stated that the restrictions aim to prevent unregistered operators from serving the Korean market while acknowledging that existing users could face difficulties withdrawing assets.

Expanding Enforcement Beyond Mobile Platforms

The website blocking measures represent a significant expansion of South Korea’s enforcement strategy. The country previously focused exclusively on restricting cryptocurrency apps through major mobile operating systems. In April 2025, South Korean authorities blocked 14 unregistered crypto exchange apps on Apple’s App Store and 17 apps through Google Play, according to Cointelegraph reporting. The new website blocks extend this enforcement approach to all digital channels through which unregistered operators reach Korean consumers.

The blocking measures employ two complementary strategies: terminating services hosted within South Korea and blocking access to websites operated from overseas locations. The FIU assesses whether overseas operators target Korean customers by examining specific factors, including whether platforms offer Korean-language services, market directly to South Korean users, or support transactions in Korean won. This targeted approach suggests regulators specifically aim to restrict platforms actively serving the Korean market.

Supporting User Withdrawals Through Cooperation

Acknowledging the challenge that website blocks present to existing users, the FIU indicated it will provide withdrawal guidance and support through the Digital Asset eXchange Alliance (DAXA) in cooperation with the affected operators. Rather than imposing abrupt withdrawal deadlines, this collaborative approach seeks to balance market protection with practical user considerations, potentially offering a regulatory model for other jurisdictions facing similar enforcement decisions.

For registered exchanges and compliant virtual asset service providers, these restrictions establish clearer market conditions by eliminating unregulated competitors from the Korean market. For the broader cryptocurrency industry, the enforcement underscores how mature markets continue systematizing regulatory oversight across all distribution channels, which may ultimately strengthen institutional confidence in properly regulated platforms and markets.

Source: South Korea’s Financial Intelligence Unit, via Cointelegraph. Not financial advice.