- South Korea’s FIU is cracking down on unregistered overseas crypto exchanges by blocking access to their platforms.
- Upbit’s South Korean partner Dunamu was served a three-month suspension in late February.
- The Bank of Korea is not interested in a Strategic Bitcoin Reserve and has never been.
South Korea’s Financial Intelligence Analysis Unit (FIU) is significantly increasing its enforcement on cryptocurrency exchanges, both within the country and operating internationally. With regulatory compliance under intense scrutiny, the FIU has initiated actions against multiple trading platforms, signaling a clear and strict stance against crypto-related service providers.
The FIU is also taking decisive measures against unregistered overseas exchanges, including prominent names like BitMEX and CoinW, citing violations of South Korea’s Specific Financial Transaction Information Reporting and Use Act.
Authorities plan to block access to these non-compliant platforms for Korean users, a move aimed at curbing unregulated cryptocurrency trading. Reports indicate that another overseas exchange was also targeted in this action.
Why is South Korea’s FIU Cracking Down on Major Crypto Exchanges?
This development has triggered concerns among market participants, who fear restricted access to widely used trading platforms. So far, the affected exchanges have not released official statements addressing the FIU’s actions.
“This action reflects a growing trend among governments to enforce stricter regulations on crypto exchanges operating within their jurisdictions,” said crypto analyst Alan Brown.
Related: Bitcoin Not Suitable for Reserves, Says South Korea’s Central Bank
Which Major Crypto Exchanges Are Facing FIU Scrutiny?
Upbit, one of South Korea’s largest cryptocurrency exchanges, has also faced regulatory headwinds. The FIU reportedly issued a suspension notice against Upbit in January over alleged Know Your Customer (KYC) violations. Dunamu, the exchange’s partner firm which operates Upbit’s South Korean business, also received a three-month suspension notice in late February due to a “violation of the obligation to prohibit transactions with unreported virtual asset operators.”
In a separate, high-profile development, South Korean prosecutors raided the offices of Bithumb on March 20th following allegations of significant financial misconduct involving its former CEO, Kim Dae-sik. Prosecutors suspect Kim embezzled substantial funds from the exchange, including a 3 billion Korean won (over $2 million) apartment lease deposit, to finance a personal real estate purchase.
Why is the Bank of Korea Against a Strategic Bitcoin Reserve?
Regarding the potential for a strategic reserve of digital assets, the Bank of Korea issued a statement, confirming that the central bank is not interested in acquiring Bitcoin (BTC).
Related: South Korea to Release Institutional Crypto Investment Guidelines in Q3 2025
Earlier this month, South Korea’s Democratic Party was asked to persuade the Bank of Korea to discuss the potential benefits of a strategy Bitcoin reserve, similar to US President Donald Trump’s administration.
The inherent volatility of BTC led the central bank to swiftly reject the idea of a strategic Bitcoin reserve. As per CoinMarketCap, Bitcoin soared to an all-time high of $109,114.88 two months ago and currently trades at $84,106.10, down 22% from those levels.
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