In a surprising turn of events, South Korea’s Financial Intelligence Unit (FIU) has successfully compelled Google LLC to restrict domestic access to 17 unregistered crypto apps on Google Play. This move, which took effect on March 25, 2025, specifically targets foreign crypto exchanges such as KuCoin and MEXC that have been operating without proper registration under South Korean law.
As a result of this action, new users will be unable to install these apps, and existing users will not receive updates. The crackdown is rooted in the Specific Financial Transaction Information Reporting and Use Act, which requires foreign virtual asset service providers (VASPs) catering to South Korean customers to register with the FIU. Failure to comply can lead to penalties, including up to five years in prison or a fine of 50 million won.
South Korea’s regulatory reach has been expanding, with previous actions taken against unregistered foreign crypto exchanges in 2022 and 2023. Under South Korean law, foreign exchanges operating domestically must meet specific criteria, such as offering a Korean-language website, running promotions targeting local investors, or supporting transactions in Korean won. Exchanges failing to meet these requirements are considered unregistered and subject to enforcement actions.
The FIU, in collaboration with financial and cybersecurity agencies, continues to monitor and restrict these platforms, limiting their reach in the country. The regulatory actions have had a noticeable impact on the market, with KuCoin Token (KCS) experiencing a minor price drop of 0.3% in the past 24 hours.
In addition to Google Play, authorities are working on blocking website access and coordinating with financial institutions to prevent transactions with unregistered platforms. Recent reports indicate that authorities are cracking down on unregistered overseas crypto exchanges operating illegally in the country, including platforms like BitMEX, KuCoin, CoinW, Bitunix, and KCEX.
Separately, South Korean prosecutors have launched an investigation into Bithumb, one of the country’s largest exchanges, over allegations of misused funds to secure an apartment lease for its former CEO, Kim Dae-sik. Investigators recently raided Bithumb’s headquarters as part of the probe.
These developments come amid a surge in crypto activity in South Korea, with the number of investors surpassing 15 million and crypto exchange deposits doubling in late 2023.
The restriction of unregistered crypto apps on Google Play reflects a broader trend of government intervention in the crypto space. South Korea’s regulatory approach aims to create a safer trading environment and combat illicit financial activities associated with cryptocurrencies. The FIU is actively working with Apple Korea and other regulatory bodies to implement similar measures across different platforms, potentially further limiting unregistered exchanges’ access to South Korean users.
For South Korean crypto traders, the FIU has provided a list of registered operators on its website, urging users to withdraw funds from unregistered exchanges and transition to compliant platforms. Looking ahead, crypto exchanges may need to reassess their operational strategies to gain access to South Korean markets, enhancing compliance efforts and securing proper licensing to meet regulatory requirements.