South Korea Blocks 27 Illegal Crypto Sites

South Korea to Block 27 Unregistered Crypto Websites

South Korea is set to block access to 27 cryptocurrency websites operated by businesses that have not registered with the country’s financial authorities. The Korea Communications Standards Commission (KCSC) approved the restrictions on October 6 and 7, following a request from the Financial Intelligence Unit (FIU).

This move expands existing measures that targeted unregistered crypto mobile applications to now include websites, aiming to prevent potential financial losses for users by blocking illegal crypto services before they can cause harm.

The FIU stated that operating unregistered crypto businesses is illegal under South Korea’s financial reporting laws, regardless of whether user losses have been confirmed. The KCSC’s decision to block the 27 identified operators, which are currently active, includes taking action where services may have been terminated.

Regulatory Requirements for Crypto Businesses

To operate legally in South Korea, cryptocurrency businesses must meet specific requirements, including obtaining Information Security Management System (ISMS) certification and registering with the FIU. These regulations also extend to foreign platforms that target South Korean residents. Authorities assess this by considering factors such as whether a platform offers a Korean-language website, conducts marketing campaigns for local customers, or supports payments in Korean won.

Operating an unregistered crypto business can result in penalties of up to five years in prison or a fine of up to 50 million won.

Risks Associated with Unregistered Platforms

The FIU has warned that unregistered platforms pose significant risks to users, including exposure to hacking, personal information leaks, money laundering, and investment fraud. Users could also face financial losses if a platform accepts payments without delivering the promised crypto assets.

A joint investigation by the Digital Asset exchange Alliance (DAXA) in June 2026 revealed that transaction fees on detected illegal platforms ranged from 1.5% to 10%. These fees were substantially higher, up to 62 times the average fee of 0.16% charged by South Korea’s five largest domestic won-based crypto exchanges. Authorities also cautioned that users might encounter excessive, undisclosed fees and struggle to recover their funds.

Broader Enforcement Efforts

South Korea has implemented several measures against unregistered crypto operators, including restricting transactions, notifying investigative agencies, and requesting the blocking of websites and applications. The FIU has referred 44 illegal companies to investigative agencies and introduced measures to prevent credit card purchases and payments involving unregistered providers.

The FIU indicated that the latest decision will enable authorities to act more swiftly, with the stated aim of “preventing money laundering and protecting users” through collaboration with relevant agencies and the identification of illegal operators.

Addressing User Fund Withdrawals and Future Measures

The website restrictions may present challenges for existing users needing to withdraw their funds. The FIU plans to collaborate with DAXA and the affected operators to provide guidance on withdrawal methods and procedures.

Authorities will also monitor for alternative websites that operators might establish to circumvent the new restrictions. The FIU intends to request further reviews and blocks as new sites are identified. These measures underscore South Korea’s commitment to extending its regulatory reach against unregistered crypto businesses from mobile apps to websites, allowing for proactive intervention before confirmed user losses occur.