South Korea Moves to Block Illegal Overseas Crypto Exchanges

South Korean authorities are advancing efforts to block access to illegal overseas cryptocurrency exchanges, as regulators seek to tighten oversight of unregistered virtual asset service providers linked to financial crime.

According to local reports, the Korea Communications Standards Commission (KCSC) and the Financial Intelligence Unit (FIU) recently discussed new criteria for restricting access to foreign crypto platforms. The proposal would prioritize blocking exchanges where authorities have identified concrete evidence of user harm, including investment fraud, money laundering, illegal foreign exchange transactions, tax evasion and personal data breaches.

The KCSC suggested adopting a framework similar to that used for scam websites, allowing platforms to be blocked based on police investigation reports or confirmed criminal cases. The FIU said it will review the proposal internally.

The move follows months of discussions between the two agencies over how to regulate overseas exchanges operating without registration in South Korea. While the FIU has argued that unregistered platforms pose significant financial crime risks and should face stronger enforcement, the KCSC previously raised concerns about blocking websites solely for operating without registration.

The discussions also highlighted regulatory challenges involving major global exchanges. Officials noted that Binance is currently excluded from review after suspending Korean-language services and domestic marketing, prompting debate over whether such measures create loopholes that overseas platforms could exploit.

The latest proposal reflects South Korea's broader efforts to strengthen oversight of the digital asset market by targeting offshore platforms associated with fraud and other illicit financial activities. Authorities said they will continue coordinating with law enforcement to enable faster action against illegal virtual asset service providers where sufficient evidence of criminal activity exists.