South Korea Plans Sanctions Against BitMEX, KuCoin, CoinW

South Korea is planning to impose sanctions on several cryptocurrency exchanges operating illegally in the country.

The Financial Intelligence Unit (FIU) has identified a number of exchanges that have not registered as Virtual Asset Service Providers (VASPs), which is a requirement under South Korean law.

Among the exchanges facing potential sanctions are BitMEX, KuCoin, CoinW, Bitunix, and KCEX. Authorities believe these platforms are offering services to South Korean users through Korean-language websites without the necessary registration.

"We are currently reviewing blocking access to unreported overseas exchanges that are providing services to domestic investors through consultation with the Korea Communications Standards Commission," an FIU official said.

In January, KuCoin agreed to pay almost $300 million in fines after pleading guilty to operating an unlicensed money-transmitting business.

KuCoin's founders, Chun Gan and Ke Tang were charged with conspiring to operate an unlicensed money-transmitting business and failing to implement a robust anti-money-laundering program back in March 2024.

BitMEX is also reportedly seeking a buyer. According to sources familiar with the matter, the once-dominant derivatives exchange has engaged boutique investment bank Broadhaven Capital Partners to manage a sale process.

The platform is widely credited with popularizing perps, or perpetual futures, a highly leveraged derivative product that became a cornerstone of crypto trading. For years, BitMEX was synonymous with high-stakes crypto speculation and a dominant force in the derivatives market.

However, the exchange’s reputation has been shadowed by past regulatory troubles. In 2020, US authorities alleged BitMEX failed to implement adequate anti-money laundering measures, leading to criminal charges against Hayes and his co-founders, and a subsequent guilty plea from the platform itself.

The FIU is compiling information on instances of damage caused by these unregistered exchanges. "We are organizing damage cases and related data to strengthen communication between authorities, and we expect to see tangible measures taken within this year," the South Korean official added.

Last week, the Bank of Korea (BOK) officially stated that it is not considering incorporating Bitcoin into its foreign exchange reserve.

In response to a written inquiry from a member of the National Assembly's Strategy and Finance Committee, the central bank said it was concerned about Bitcoin's high price volatility which could lead to significant transaction costs when converting Bitcoin into cash.

South Korea's Financial Services Commission (FSC), the nation's top financial regulator, also announced plans to issue comprehensive guidelines for institutional cryptocurrency investment by the third quarter of this year.

While the broader investment guidelines for public companies and professional investors are targeted for release in Q3, the FSC indicated an even faster pace for specific entities, aiming to publish guidelines for non-profit organizations and cryptocurrency exchanges as early as April.