South Korea to Crackdown on Illegitimate Crypto Businesses

The South Korean government has announced that they will begin cracking down on “illegitimate crypto businesses” in addition to money laundering based in cryptocurrency.

The Office for Government Policy Coordination (OPC) announced the beginning of the enforcement on Monday. South Korean authorities will be targeting “all illegal activity involving virtual assets” during what they are calling a “special enforcement period” from April to June.

The enforcement will piggy back off of cryptocurrency law that was just signed into effect earlier in 2021.

In its declaration of the enforcement, the OPC gives state agencies the authority to monitor, investigate and punish businesses that do not comply with the crypto law. These businesses are known as virtual asset service providers, or VASPs.

Earlier in April, the Financial Services Commission (FSC) told crypto traders to use platforms that are “sustainable in the long run”. Many in South Korea saw this as confirmation that VASPs would be deemed illegal in the course of the enforcement.

The enforcement also paves the way for South Korea’s anti-trust watchdog, the Fair Trade Commission, to review user agreements from VASPs and make a determination on whether they are in breach of fair trade law.

Multiple scams and pyramid schemes involving cryptocurrency have occurred in South Korea, most of them promising customers massive returns on initial investment. Similar scams have been reported by crypto trading platform Coinbase, citing Nigeria as a hot spot for such activity.

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