Authorities in South Korea are looking to investigate major cryptocurrency exchange OKX over complaints of the platform’s improper registration in the country.
According to a report by News1 Media, South Korea’s Financial Intelligence Unit (FIU) received complaints from the country’s Digital Asset Exchange Association (DAXA).
OKX Under Regulatory Probe
DAXA, an alliance of South Korea’s five major crypto trading platforms, including Upbit, Bithumb, Coinone, Korbit, and Gopax, received information concerning OKX’s misconduct from unidentified sources. The organization conducted its research before taking the matter to the FIU.
One of the requirements for a foreign platform to operate in South Korea is language support. Overseas exchanges must translate their content to Korea for users’ easy assimilation. Companies that fail to implement this criterion but continue to offer services to residents violate the Specific Financial Information Act.
Currently, OKX does not support Korean on its website; hence, the firm is not properly registered to offer its services to residents. The trading platform removed Korean language translations and shut down official local community social media channels in September 2021, and the arrangement has remained so till now.
However, the reports DAXA received accused OKX of promoting its Jumpstart program and other services in Telegram communities using influencers.
The FIU intends to confirm the allegations through investigations before deciding on the next step.
S. Korea Hostile Toward Crypto
OKX’s decision to cease support for South Korea came as regulators in the country instructed foreign exchanges to either register their businesses locally or withdraw Korean language services from their platforms.
The country enforced strict measures on the crypto industry after the collapse of the Terra ecosystem in 2022, demanding regular reports from exchanges operating within its borders. Korea’s hostile stance on cryptocurrencies extended to digital asset investment vehicles like spot Bitcoin exchange-traded funds, which regulators banned to stabilize the financial market and protect investors.
The approval of spot Bitcoin ETFs from the U.S. Securities and Exchange Commission (SEC) last month did not seem to affect South Korea’s viewpoint of such crypto investment vehicles until a couple of days ago.
As CryptoPotato reported, South Korea’s Financial Supervisory Service (FSS) chief intends to meet with U.S. SEC chair Gary Gensler soon to discuss discount measures like spot Bitcoin ETFs.