South Korea Cracks Down on Overseas Crypto Exchanges Targeting Domestic Investors
Four unregistered overseas crypto exchanges have been referred to South Korean police for investigation after offering Korean-language services and recruiting investors. The Digital Asset Exchange Alliance (DAXA) detected evidence of illegal activity by these exchanges, which targeted South Korean investors.
The exchanges operated without registering with South Korea's financial authorities, despite the fact that they offered official Korean-language services on their websites and mobile apps, displayed transaction prices in Korean won, and ran 'reward centers' that paid compensation in Tether (USDT) or proprietary points tied to logins, deposits, and trading volume.
This is the second referral for investigation this year, with DAXA previously referring 12 entities to police, including eight illegal over-the-counter exchanges and four unregistered overseas exchanges. DAXA Executive Vice Chairman Kim Jae-jin emphasized that 'any operation targeting domestic users clearly falls under South Korea's Special Financial Transactions Act compliance requirements.'
If these exchanges experience unexpected withdrawal suspensions, unilateral service terminations, or large-scale hacks, investors would find it virtually impossible to obtain relief within South Korea's legal framework. DAXA plans to continue operating its monitoring network against unregistered illegal business activities.