Korea FIU orders blocking of domestic access to two unregistered virtual asset service providers; DAXA refers three involved entities for investigation

Under current law, operators conducting virtual asset business without proper registration may face up to five years in prison or a fine of up to 50 million South Korean won. Overseas operators targeting Korean residents are equally subject to this regulation. According to the FIU, these unregistered operators operate in a regulatory blind spot and may be exploited for money laundering. In June this year, a joint enforcement investigation by DAXA and compliant operators revealed that the average trading fees of the detained entities ranged from 1.5% to 10%, with the highest rate reaching approximately 62 times the average of Korea’s top five won-based exchanges (0.16%).