▲ National Office of Investigation
The National Office of Investigation under the National Police Agency announced in a press release today (June 16) that it will "strictly crack down on illegal over-the-counter (OTC) exchanges, primarily through the cyber investigation units of municipal and provincial police agencies," warning that such transactions carry risks of personal data leaks and can be exploited for money laundering or concealing criminal proceeds.
The police also stated that they will establish a continuous cooperation system, including information sharing, with the Digital Asset eXchange Alliance (DAXA).
Over a three-month period starting in February, DAXA conducted a joint investigation with domestic virtual asset service providers. They identified signs of illegal operations at 12 entities—including 8 OTC exchanges and 4 unregistered overseas exchanges—and referred them to the police for investigation.
Investigations revealed that these exchanges had been operating outside the regulatory framework by exchanging virtual assets for Korean won or targeting Korean users via Telegram and websites without registering as virtual asset service providers with the Korea Financial Intelligence Unit (KoFIU).
Notably, the average transaction commission for the uncovered illegal OTC exchanges ranged from a minimum of 1.5% to a maximum of 10%. Some firms reportedly charged fees up to 62 times higher than the average of the five major domestic virtual asset exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax).
Furthermore, it was found that some exchanges demanded personal information, such as resident registration cards and copies of bankbooks, from users without any legal basis, raising concerns over potential violations of the Personal Information Protection Act.
Under Article 7 of the Act on Reporting and Using Specified Financial Transaction Information, engaging in the virtual asset business for profit without registering with the KoFIU under the Financial Services Commission can result in up to five years in prison or a fine of up to 50 million won.
(Photo: Yonhap News TV, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.