DAXA flags four unreported overseas crypto exchanges, seeks police investigation

The Digital Asset eXchange Alliance (디지털자산거래소 공동협의체·닥사·DAXA) has identified four unreported overseas digital asset exchanges that have been operating for South Korean users and requested a police investigation.

DAXA said on Sept. 1 it asked police on Aug. 31 to investigate four overseas exchanges that failed to meet reporting obligations under the Act on Reporting and Using Specified Financial Transaction Information.

Under the law, businesses conducting digital asset-related operations for South Korean users must file a report with the Financial Intelligence Unit (FIU). Those operating without filing a report can face up to 5 years in prison or a fine of up to 50 million won.

DAXA said it examined the exchanges' websites and mobile applications and confirmed signs of business targeting South Korean users.

Key examples include providing official Korean-language services, displaying trading prices converted into won (KRW), and running reward programmes that pay out Tether (USDT) or points based on logins, deposits and trading volumes.

It also confirmed cases in which the overseas exchanges provided Korean-language screens and won conversion information and carried out USDT rewards and deposit- and trading-related promotions for South Korean users.