The Digital Asset Exchange Alliance (DAXA), a crypto council in South Korea, claims that OKX introduced its Jumpstart program to South Korean investors without proper registration. DAXA, a working group consisting of the five largest cryptocurrency exchanges in South Korea, announced today that it has reported the global crypto trading platform OKX to the authorities for allegedly operating locally without proper registration.
Investigation Initiated Over Allegations
According to a new development, OKX, despite not explicitly offering services to South Korean investors, has been reported to the authorities by DAXA for allegedly promoting its Jumpstart program to local crypto users through Telegram influencers.
Meanwhile, a spokesperson for DAXA stated that they do not have the authority to make a decision regarding the alleged violation by OKX. The spokesperson emphasized that the Financial Intelligence Unit is the one to make the decision.
Regulatory Environment in South Korea
South Korea effectively prevents all foreign exchanges from legally serving South Korean investors by requiring every cryptocurrency exchange to register with regulators before offering trading services. The Financial Services Commission had notified 27 foreign exchanges in 2021 to either register locally or withdraw Korean language services from their platforms.
However, such authority does not prohibit South Korean users from accessing foreign exchanges. The primary concern of South Korean regulators is whether foreign crypto platforms target local investors through marketing, offer trading in Korean Won, or provide Korean language services.
Expected Investigation
The Financial Intelligence Unit, a regulatory supervisor affiliated with the FSC, is expected to initiate an investigation into OKX following the report by DAXA. The initiation of the investigation could result in penalties for the exchange, which could mean an abrupt end to its activities in the country before they even start.
DAXA was established in 2022 following the collapse of the Terra-Luna crypto project, with the aim of taking joint action in various events that could affect the local crypto ecosystem. Its members, which are cryptocurrency exchanges Upbit, Bithumb, Korbit, Coinone, and Gopax, account for over 99% of the local crypto trading volume.
