South Korea Orders Blocks on 27 Unregistered Crypto Exchange Websites

Registration rules now being enforced more broadly

South Korean authorities said overseas exchanges must comply with local rules if they are serving users in the country. The requirements include obtaining Information Security Management System certification and filing a report with the FIU.

Regulators have said foreign operators can fall under these rules if they target Korean customers through Korean-language websites, local marketing, or support for payments in won. In that context, the latest action extends enforcement from app marketplaces to direct access through exchange websites.

Potential penalties and wider restrictions

Operating without the required registration can carry criminal penalties of up to five years in prison or a fine of as much as 50 million won, or more than $37,000, according to the authorities.

The FIU said it has already referred 44 unregistered virtual asset service providers to investigative agencies. South Korea has also introduced measures to curb links between licensed domestic exchanges and unregistered operators, while purchases of virtual assets from such platforms by credit card have been restricted.

Authorities prepare for evasions and user withdrawals

Officials said they will keep watching for alternative domains that blocked exchanges may try to use to continue reaching South Korean users. If new addresses are used to bypass the restrictions, additional website blocks may follow.

For customers who still need to withdraw assets from affected platforms, the authorities said information on withdrawal methods and procedures will be provided through the Digital Asset Exchange Association, or DAXA.

Broader crypto oversight continues alongside tokenization plans

The website blocks come as South Korea maintains a tougher posture on crypto-related misconduct. In February, a Seoul court sentenced crypto asset management firm chief executive Jong-hwan Lee to three years in prison after finding that he manipulated token prices and generated about 7.1 billion won, roughly $5 million, in illegal profit. He was also fined 500 million won in what the source described as the first case under the Virtual Asset User Protection Act.

Police have also targeted crypto-linked betting activity. In September, they opened cases against 26 South Korean users of prediction market Polymarket over bets totaling about 17.6 billion won, and 18 of those users were referred to prosecutors. Investigators said they used public blockchain records in the probe and argued the activity may qualify as illegal gambling.

At the same time, the country is advancing plans to bring conventional financial assets onto blockchain rails. South Korea recently outlined a phased roadmap to tokenize stocks, bonds and investment funds, with the first phase expected to start in February 2027 after amendments to the Electronic Registration Act take effect. Companies are also still exploring regulated opportunities in the market, including Ripple through partnerships tied to custody, tokenization and tokenized government bond initiatives.