South Korea Pulls Crypto Exchange Apps from App Stores

South Korea is taking strong action against cryptocurrency platforms that fail to comply with its financial regulations. In a major move to safeguard investors, the government has ordered the removal of multiple unregistered crypto exchange apps from both Apple’s App Store and Google’s Play Store. These apps were operating illegally in the country, violating South Korea’s strict rules for digital asset businesses.

The Financial Services Commission (FSC), South Korea’s top financial regulator, announced the crackdown. On March 25, Google removed 17 unauthorized crypto apps from its Play Store. Later, on April 11, Apple followed by deleting 14 more from its App Store. Well-known global exchanges like KuCoin and MEXC were among those taken down.

Under South Korean law, all foreign cryptocurrency platforms must register with local authorities before offering services to users in the country. The banned exchanges had not completed this legal requirement, making their operations unlawful. The FSC issued a warning, stating that trading on unregistered platforms is highly risky, investors could lose their funds or even face legal consequences for using illegal services.

KuCoin, one of the affected platforms, released a statement saying it respects South Korea’s regulations and is committed to following rules in all countries where it operates. The exchange also emphasized its focus on user security and compliance with global financial laws. Other banned exchanges have yet to make public comments, but experts believe some may attempt to register properly to return to the South Korean market.

The app removals are just one part of South Korea’s larger effort to combat illegal activities in the cryptocurrency industry. Earlier this year, the government announced plans to upgrade its temporary crypto crime task force into a permanent unit. Originally formed in July 2023, this team has already investigated several major cases. Once made permanent, it will have greater authority, funding, and manpower to track down fraud, money laundering, and other crypto-related crimes.

There have been several high-profile incidents that have highlighted the need for stricter regulations:

1. Stolen Public Funds for Crypto Trading – A government worker was caught stealing 500 million won ($342,000) from public funds, including donations meant for flood disaster relief, to invest in cryptocurrency.
2. Politician’s Hidden Crypto Assets– A former lawmaker was accused of secretly holding digital assets but was later found not guilty due to insufficient evidence.
3. Fake Crypto Mining, Real Illegal Gambling – Authorities in Gwangju raided what appeared to be a crypto mining facility, only to discover an illegal gambling operation moving over 140 million won ($95,000).

Currently, just 28 cryptocurrency businesses are officially approved to operate in South Korea. The government’s decision to remove unregistered apps is part of a strategy to reduce scams, protect users, and ensure financial stability. By enforcing strict rules, officials hope to prevent fraud and create a safer environment for crypto investors.

South Korea’s message is unmistakable: Cryptocurrency exchanges must follow the law, or they will be banned. Whether operating online or offline, platforms that ignore regulations will not be allowed to serve South Korean users.

As the crypto industry evolves, other countries may look to South Korea’s approach as a model for balancing innovation with security in the fast-changing world of digital finance. Major industry actors like Riot Platforms (NASDAQ: RIOT) will be watching to see whether the markets in which they have operations also move to enact clear regulations and enforce them.

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