OKX Faces Heat from South Korea Over Unregistered “Illegal” Activity

South Korea is currently investigating OKX, a major global cryptocurrency exchange, for operating without proper registration in the country. This probe is part of a larger crackdown on unregistered digital asset providers in South Korea. Here’s a breakdown of the key developments:

OKX Under Scrutiny

OKX, the third-largest cryptocurrency exchange globally, is under scrutiny for allegedly promoting its services, such as the ‘OKX Jumpstart’ platform, to Korean investors through Telegram influencers, as reported by News1. This has raised concerns about OKX targeting Korean users without meeting regulatory requirements.

In South Korea, cryptocurrency exchanges must register before offering trading services to local investors. Foreign exchanges must also register locally or stop providing services in the Korean language to operate legally in the country.

Read More: South Korea Crypto Regulation: This is What Investors Need to Know

FIU Investigation

The Financial Intelligence Unit (FIU), under the Financial Services Commission (FSC), is expected to investigate OKX based on a report from the Digital Asset Exchange Association (DAXA). This collaborative effort among South Korea’s top cryptocurrency exchanges shows a commitment to enforcing regulatory compliance.

If proven guilty, OKX could face severe consequences. South Korea has strict rules for virtual asset service providers (VASPs) to prevent fraud, with penalties such as lifetime imprisonment for illegal financial activities.

Maintaining Market Integrity

Discussions are ongoing regarding enhanced surveillance for irregular transactions and the establishment of self-regulatory measures. The emphasis on removing illegal activities from the industry is crucial for fostering growth, with active surveillance playing a pivotal role in maintaining market integrity.

Proactive Measures by South Korea

In a significant move, the Financial Services Commission declared the Enforcement of the Virtual Asset User Protection Act, set to be in action from July 19th. This proactive step underscores South Korea’s commitment to mitigating potential financial losses caused by scammers or exchanges engaged in illegal activities, ensuring a fair market for all.

In summary, the investigation into OKX is a crucial moment shaping the future of cryptocurrency in South Korea, highlighting the nation’s dedication to maintaining a secure and regulated environment for the growing crypto industry.

Also Read: Bitcoin ETFs Coming to South Korea? Republic Officials Push for Reconsideration