South Korea Cracks Down on 40 Unregistered Crypto Platforms Targeting Local Users

Highlights:

• South Korea reported around 40 unregistered crypto platforms to investigators and warned users about serious financial risks.
• Illegal operators target users through YouTube, Telegram, and social media with promises of high returns and tips.
• Authorities warn that running an unregistered crypto business carries up to five years in prison or heavy fines.

South Korea has stepped up action against illegal crypto businesses after authorities reported around 40 unregistered virtual asset operators to investigative agencies. The Financial Services Commission (FSC) announced on Wednesday that users should exercise caution when using crypto platforms promoted on social media, online communities, and overseas websites.

According to the FSC, only 28 virtual asset service providers are currently registered with the Korea Financial Intelligence Unit (FIU). Any company that offers crypto trading, exchange, transfer, custody, brokerage, or similar services to Korean users without FIU registration is operating illegally under South Korea’s Special Financial Transactions Information Act.

JUST IN: South Korea's central bank warns that expanding institutional adoption could increase the risk of crypto volatility spilling into traditional financial markets. pic.twitter.com/bMpRUc3eWR

— The Moon Show (@TheMoonShow) June 24, 2026

Illegal Crypto Platforms Target Users Online

The FSC said many unregistered crypto operators are reaching users through YouTube, Telegram, open chat rooms, referral links, and online promotions. Some platforms attract investors by promising high returns, claiming future listings, or offering private investment tips.

The warning also covers foreign crypto exchanges. The FSC said an overseas platform can still be illegal if it serves Korean users without FIU registration. This includes platforms that offer services in Korea, run referral programs, or provide support to local users. The regulator also told users not to invite others to unregistered foreign exchanges. Such referrals can help illegal platforms spread and may put both users and promoters at risk.

According to authorities, such platforms pose a risk to users’ funds and even personal information. Some may request identification documents such as an ID card or a bank statement, among others, without any legal justification. Some may just keep users’ funds and not deliver their crypto.

The FSC also warned about illegal OTC crypto services, where people buy or sell crypto directly outside regular exchanges. Some of these services charged fees between 1.5% and 10%, far higher than the 0.16% average fee on South Korea’s five major won-based exchanges.

On June 10, DAXA and registered crypto firms found 12 illegal operators during a joint investigation. These included eight illegal OTC exchanges and four overseas exchanges that were serving Korean users without proper registration.

FIU Moves to Block Illegal Crypto Platforms and Warns Users

The FIU has asked related agencies, Google, and Apple to help block access to websites and apps linked to illegal operators. It is also working with police, prosecutors, customs officials, DAXA, and registered crypto firms to detect more illegal activity.

In South Korea, those who engage in unregistered crypto activities face up to five years’ imprisonment or a fine of up to 50 million won. Registered crypto businesses could also incur penalties for dealing with unregistered operators. The FSC advised users to check the FIU registration list before using any crypto platform. It also advised users to cash out their money as soon as possible when they find themselves using an unregistered service. 

South Korea’s latest warning comes after several recent crypto crime cases in the country. Police recently arrested 56 people in a USDT laundering case linked to phishing and investment fraud. Investigators found 265 related fraud cases, with losses of about 25.7 billion won.

South Korea has also partnered with Chainalysis to strengthen crypto crime investigations. Through this partnership, police officers will receive training to trace stolen crypto across wallets, exchanges, bridges, and overseas platforms.

🇰🇷 We are honoured to have signed an MoU with the Korean National Police Agency (@polinlove) to strengthen virtual asset investigation capabilities in South Korea.

The agreement deepens our collaboration across training, professional certification, and the joint development of… pic.twitter.com/m4Et1jZU3G

— Chainalysis (@chainalysis) June 10, 2026