Due to claims that OKX, a significant international cryptocurrency exchange, was not properly registered in South Korea, the financial authorities in that nation opened an inquiry into the company. Notably, the action is a part of a larger campaign in South Korea to target unregistered virtual asset providers, or VASPs.
The exchange, which is well-known for its substantial global trading volume, is currently under investigation for reportedly using Telegram influencers to market its services, such as the “OKX Jumpstart” platform, to Korean investors.
South Korea Will Examine OKX’s Activities
According to a recent revelation from industry sources and the South Korean media site News 1, OKX is being investigated for allegedly operating in South Korea without the required registration. A group of the leading cryptocurrency exchanges in South Korea, known as the Digital Asset Exchange Association (DAXA), submitted OKX to local authorities for allegedly providing services to Korean investors without adhering to legal standards.
Concerns have been raised over the exchange’s possible targeting of Korean users in relation to its marketing of its Jumpstart program through Telegram influencers, which is purportedly funded by OKX. Notably, before offering trading services to local clients, South Korea’s regulatory system requires all cryptocurrency exchanges to register with the government.
In order to conduct business lawfully in the nation, international exchanges must also register locally or stop offering Korean language services. In light of the DAXA report, the Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) is anticipated to launch an inquiry into OKX, demonstrating the government’s dedication to enforcing regulatory compliance in the cryptocurrency sector.
Tight Regulation and More Inspection
The Financial Services Commission (FSC) of South Korea has implemented more stringent guidelines for virtual asset service providers (VASPs), with a strong emphasis on executive recruitment procedures that are rigorous in order to support industry oversight. Plans are also in place to stop manipulating the cryptocurrency market and engaging in illicit trading; offenders risk life in jail if they profit unfairly from over 5 billion won. The CEO of Bitsonic is accused of committing a cryptocurrency scam and might spend seven years in prison. This is noteworthy.
Local media state that the Financial Supervisory Service is working on a regulatory roadmap that will include self-regulating measures and a requirement for ongoing surveillance for anomalous transactions by April. Notably, the implementation of the roadmap was reviewed in a recent meeting with VASP representatives, who emphasized the necessity for extensive organizational and control systems to stabilize the market.
Director Lee Bok-hyeon called for active surveillance to preserve market integrity and stressed the significance of eliminating illicit activity to promote industry development.
DAXA’s move against OKX, however, emphasizes the cooperative efforts of the top cryptocurrency exchanges in South Korea to uphold integrity and regulatory compliance within the regional crypto industry. The findings of the OKX probe may have a big impact on the country’s overall cryptocurrency scene as South Korean authorities step up their crackdown on unreported VASPs, including overseas exchanges that cater to Korean investors.