Recently, the South Korean government sent a clear message on crypto exchanges that there would be no option for them but to follow its current policies.
The Financial Services Commission (FSC) has sent a warning to 27 crypto exchange companies that their operations would be shut down if they don’t register for a license.
These crypto companies, which are formally called virtual asset services providers (VASPs), are starting to feel the heat from the government’s increasing pressure to follow new policies.
Prosecution and imprisonment
The 27 VASP’s names were not disclosed by FSC’s Financial Intelligence Unit. Also, they were given until September 24 to report to the government.
The Financial Service Commission also made it clear that prosecution is waiting for crypto companies that fail to submit requirements before the deadline.
According to the South Korean law: “The Act requires VASPs to register with the KoFIU as the law equally applies to foreign VASPs that conduct activities outside Korea but have domestic consequences within Korea.”
Also, FSC added that non-compliant VASPs would face up to five years imprisonment and a fine of 50 million Korean Won (US$43,500)
More measures against non-compliants
The government has also advised its citizens to check a crypto exchange’s legitimacy before making any transactions with it.
To further prevent unlicensed crypto exchange companies from operating, FSC is also considering blocking their websites to stop their online operations.
It would also partner with law enforcement agencies abroad and financial regulators to corner non-compliant companies and dismantle their remaining options to operate.
These new measures are in response to the growing reports of fraudulent operations in the country in which cryptocurrencies are directly involved.
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