South Korea FIU blocks domestic access to 27 illegal crypto sites, including KuCoin and MEXC

South Korea’s Financial Intelligence Unit (FIU), under the Financial Services Commission, said on the 13th that it blocked domestic access to 27 internet sites operated by illegal virtual asset providers after a review by the Korea Communications Standards Commission. For payment teams and crypto businesses, the key point is simple: the block now applies not just to apps on Apple and Google, but to websites too.

1. The blocked sites include KuCoin, MEXC, Phemex, XT.com, and Bitrue. The FIU said the measure is aimed at stopping user harm early, before unregistered operators can keep taking business from Korean users.
2. Under Korea’s Act on Reporting and Using Specified Financial Transaction Information, unregistered virtual asset business activity is treated as an illegal act. To operate legally as a virtual asset service provider in Korea, a company must obtain Information Security Management System (ISMS) certification and file a report with the FIU.
3. Operating a virtual asset business without reporting is classified as an illegal virtual asset operator and is subject to criminal punishment. The same law also applies to foreign operators if they conduct business targeting Korean nationals.
4. The FIU said illegal operators are outside government oversight, which means anti-money laundering controls and user asset protection are not adequately in place. It also flagged security risks such as personal information leaks and hacking, as well as the use of these channels to conceal criminal funds linked to drugs and money laundering.
5. The regulator also pointed to investment fraud scenarios, including cases where a user pays for a transaction but does not receive the virtual asset, or where fees are set far above those charged by reported virtual asset service providers without proper notice. In those cases, the FIU said, recovering losses is difficult.