DAXA Requests Investigation into Four Unreported Overseas Cryptocurrency Exchanges

The Digital Asset Exchange Association (DAXA) announced on the 1st that it has identified four overseas cryptocurrency exchanges that have been operating without reporting to authorities and targeting domestic users. DAXA reported these exchanges to the police on the 31st of last month. The request for investigation was made in response to the illegal domestic operations of unreported overseas exchanges that failed to comply with the reporting obligations under Article 7 of the Specific Financial Information Act. According to Article 17 of the same law, operating without reporting to the Financial Intelligence Unit (FIU) of the Financial Services Commission can result in imprisonment for up to five years or a fine of up to 50 million KRW. Key violations identified by DAXA include the provision of official Korean language services on their websites and mobile apps, the display of trading prices in Korean Won (KRW), and reward payments linked to logins, deposits, and trading volumes through a 'Benefits Center.' Unreported overseas exchanges are not subject to the management and supervision of domestic financial authorities, making their anti-money laundering (AML) and user protection systems weak. Users should be aware that they may have difficulty receiving legal protection in the event of incidents such as withdrawal suspensions, unilateral service terminations, or hacking incidents. Kim Jae-jin, DAXA's Executive Vice President, stated that