South Korea's financial regulators are intensifying their crackdown on unregistered cryptocurrency exchanges, requesting Apple to restrict access to several crypto exchange applications on its App Store. This move follows a similar request made to Google last month, signaling a concerted effort to ensure compliance with local regulations within the burgeoning digital asset space.
The Financial Services Commission (FSC) of South Korea has reportedly asked Apple to remove 14 cryptocurrency trading applications from its App Store. These include apps from well-known exchanges like KuCoin and MEXC. The FSC has stated that these exchanges were operating illegally because they had not registered with the regulator. The commission instructed Apple to block installations and updates of these apps after April 11. Previously, the FSC had asked Google to remove 17 crypto apps on March 25. It remains unclear why Apple's apps were removed later than Google's.
The regulatory action comes as South Korea witnesses a surge in cryptocurrency adoption. Data indicates that over 16 million people in South Korea, which has a population of nearly 52 million, have opened accounts on the country's top five domestic crypto exchanges. This growing interest in digital assets has prompted banks to explore partnerships with crypto firms, particularly as regulations surrounding digital assets become more defined.
The FSC's actions are rooted in the requirement for overseas virtual asset operators to report to the Financial Information Analysis Unit (FIU) before conducting business in South Korea. Failure to comply with these reporting requirements can result in severe penalties, including imprisonment for up to five years. The FIU has been actively blocking domestic access to unreported foreign virtual asset operators through website and mobile application restrictions.
Both Apple and Google have complied with the requests, removing the specified applications from their respective app stores. While the removals were framed as "requests" rather than "orders," the compliance from both tech giants underscores the importance of adhering to local regulations, even for multinational corporations.
The delisting of these apps means that South Korean users will no longer be able to install the specified crypto exchange apps, and existing users might not receive crucial updates.
Despite the stringent regulations, South Korea is also exploring avenues for institutional involvement in the crypto market. The Financial Services Commission announced a pilot program slated to launch in the second half of 2025, allowing 3,500 corporate entities to engage in cryptocurrency transactions for investment and financial purposes. This move marks a significant shift, considering that corporate crypto transactions have been banned in the country since 2017. This pilot program suggests a willingness to explore regulated integration of crypto into the financial system.
Representatives from the affected crypto exchanges, KuCoin and MEXC, have acknowledged the regulatory actions. MEXC stated that its app was no longer available on the Apple App Store and Google Play Store in Korea, and that it is reviewing measures to align with relevant policies. KuCoin stated that it is closely monitoring regulatory developments in all jurisdictions, including South Korea, and will cooperate with any regulatory requirements.
