South Korea Cuts Access to 27 Unregistered Crypto Platforms

South Korea directed internet service providers to block domestic access to 27 unregistered cryptocurrency exchange platforms, such as KuCoin, MEXC, Phemex, BingX, and BitMart. The Financial Intelligence Unit (FIU) revealed the directive on October 13.

The communications review committee in South Korea gave its approval for the blocks following assessments on October 6 and 7. Platforms hosted overseas will have access blocked, whereas those with local servers or operators will have their services terminated.

South Korea Takes Its Crypto Crackdown to 27 Websites

Previously, the FIU requested that Google and Apple prevent new installations and updates of apps from unregistered exchanges. In March 2025, Google Play restricted 17 such platforms, among them KuCoin and MEXC.

Regulators intend to request blocks as soon as they identify unregistered operations, subject to the review body's consent. The FIU stated that they will no longer delay for court decisions or verified user losses.

To determine if an offshore exchange is operating in South Korea, regulators consider factors such as Korean-language websites, marketing aimed at Korean users, and support for won payments. Running an unregistered platform carries a penalty of up to five years in prison or a fine of 50 million won.

The FIU has handed over 44 unregistered operators to investigators. It also plans to pursue blocks on substitute sites that reappear under new domain names.

What the Block Means for Korean Traders' Money

The FIU advised users with funds on unregistered exchanges to withdraw their assets right away. It recognized that the access blocks could impede withdrawals and intends to assist users via the Digital Asset eXchange Alliance (DAXA).

A KuCoin representative told BeInCrypto that the exchange adheres to regulations in all jurisdictions.

"Compliance remains central to KuCoin's business strategy. We respect applicable laws and regulations across jurisdictions and continuously strengthen our compliance framework in response to evolving regulatory requirements. User assets remain safe and secure, and we will communicate any further updates through our official channels."

BeInCrypto has also reached out to MEXC, BingX, Phemex, and BitMart for statements and will update the report with any replies.

The FIU also pointed to elevated fees. A June investigation by DAXA and registered platforms revealed that flagged exchanges imposed average fees ranging from 1.5% to 10%. That is as much as 62 times the 0.16% average charged by Korea's five biggest won-based exchanges.

According to Tiger Research, Korean investors paid approximately $3.5 billion in fees to foreign exchanges in 2025. Tiger Research and Chainalysis estimate that roughly 700 trillion won flowed from Korean to overseas exchanges between 2021 and 2026.

That figure incorporates a projection for the current year and only accounts for traceable transfers. Stablecoin outflows from South Korea's leading exchanges also continued for an 18th consecutive month as of June.

Investors who repatriate their funds will encounter a reduced market. Cryptocurrency holdings on Korean exchanges declined by 33% in the first half of 2026. Compared with the second half of 2025, the market value stood at 58.9 trillion won.

Some Korean capital has already shifted away from centralized exchanges. Tiger Research reported that wallets owned by Koreans deposited approximately $1.64 billion into Hyperliquid, Lighter, and Variational since January 2024.

Future outflow data will likely indicate whether traders from blocked platforms revert to local exchanges or migrate on-chain.