South Korea is extending its enforcement against unregistered crypto businesses from mobile applications to the open web, blocking domestic access to 27 websites that regulators say are operating without the required registration. The affected group includes major offshore platforms such as KuCoin, MEXC, Phemex, XT.com, Bitrue, BTCC, BingX and BitMart. The Financial Intelligence Unit disclosed the decision on October 13 after the country’s communications review authority approved the restrictions during meetings on October 6 and 7.
According to the official Financial Services Commission announcement, overseas virtual-asset businesses targeting Korean customers must register with the FIU under the Act on Reporting and Using Specified Financial Transaction Information. Operating domestically without registration can carry up to five years in prison or a KRW50 million fine, while registration requires compliance conditions including Information Security Management System certification. Foreign firms can fall within the regime when factors such as Korean-language services, domestic marketing or won-denominated payment support indicate that they are targeting Korean users.
Website Blocks Extend an Existing Enforcement Campaign
The latest action expands measures that previously concentrated on mobile distribution. Google restricted new installations and updates for 17 unregistered exchange apps in March 2025, while Apple followed with 14 apps in April. The new decision closes another distribution channel by extending the same enforcement perimeter to internet websites. South Korea has subsequently tightened app-store requirements further, including Google Play restrictions tied to FIU registration.
The FIU says it no longer intends to wait for confirmed customer losses before seeking access restrictions. Unregistered operation itself can trigger referral and blocking procedures once authorities determine that a provider is conducting business in South Korea. A cumulative 44 unregistered operators have already been referred to investigative authorities, and the regulator says it will monitor alternative domains that blocked businesses may use to restore access.
Domestic exchanges face related counterparty obligations. Earlier this year, the FIU imposed a KRW5.2 billion fine and partial suspension on Coinone after finding, among other violations, more than 10,000 transfers involving 16 unregistered overseas operators. The enforcement action formed part of a broader AML crackdown on Coinone’s controls. South Korea is therefore restricting both direct consumer access to unregistered platforms and the ability of registered local businesses to transact with them.
Existing Users May Face Withdrawal Friction
The FIU explicitly acknowledged that blocking websites can create problems for customers who still hold assets on the affected platforms. It said withdrawal procedures and assistance will be provided through the Digital Asset eXchange Alliance, or DAXA, with cooperation from operators. The regulator is simultaneously advising users of unregistered services to withdraw their crypto and deposits rather than treating the access block as an asset freeze.
The action does not demonstrate that offshore liquidity will automatically migrate to Upbit, Bithumb or another specific Korean exchange. South Korea’s regulated market itself contracted sharply during the first half of 2026, when domestic exchange operating profits fell 78% and average daily trading volume dropped from KRW5.4 trillion to KRW3.1 trillion. Restricting offshore platforms changes the available access routes, but the data do not establish where displaced trading volume will ultimately move.
The immediate policy change is nevertheless concrete. South Korea has moved from restricting app distribution to blocking websites of unregistered operators, while maintaining criminal penalties, transfer restrictions and investigative referrals around the same registration regime. For offshore exchanges, continued access to Korean customers increasingly depends on entering the FIU-supervised perimeter rather than simply maintaining a Korean-facing website or mobile application.
