OKX Faces Regulatory Backlash in South Korea Over Illegal Marketing of a “Jumpstart Program”

The Digital Asset Exchange Alliance alleges that OKX has engaged in activities within South Korea without legal registration.
OKX Faces Regulatory Backlash in South Korea Over Illegal Marketing of a “Jumpstart Program”

Key Insights

  • The Digital Asset Exchange Alliance alleges that OKX has engaged in activities within South Korea without legal registration.
  • OKX is accused of indirectly targeting South Korean investors for its "Jumpstart program" through Telegram influencers.
  • This situation reflects the broader regulatory environment in South Korea, where foreign exchanges must register before offering services to its citizens
  • South Korea is also preparing to introduce more stringent crypto laws.
  • Breaches of the upcoming cryptocurrency legislation might lead to penalties including at least one year of incarceration or monetary fines amounting to five times the illicit profits gained.

Top cryptocurrency exchange OKX has come under the radar in South Korea for an unwanted reason. OKX is reported to be facing regulatory issues in the region.

This is coming after the Digital Asset Exchange Alliance (DAXA), which houses prominent crypto exchanges like Coinone, Bithumb, Korbit, Upbit, and Gopax, filed a complaint against OKX

OKX Jumpstart Program Leading to Scrutinies in South Korea 

According to multiple reports, the crypto exchange has allegedly taken part in illegal cryptocurrency activities in South Korea. 

The report accuses OKX of plotting a Jumpstart Program that is indirectly aiming to get the attention of South Korean investors through the use of telegram influencers. 

Although the Seychelles-based cryptocurrency exchange is not directly targeting users from South Korea, the allegations are waxing stronger, leaving an atom of truth. 

The basis of these allegations is OKX's strategy of paying Telegram influencers to market the Jumpstart program. 

This scenario mirrors the wider regulatory landscape in South Korea, wherein foreign exchanges are required to register before providing services to its citizens. Consequently, this regulation acts as a barrier, effectively restricting foreign exchanges from catering to South Korean investors within the bounds of the law.

Details of DAXA Report on OKX to the Financial Services Commission (FSC)

The Digital Asset Exchange Alliance (DAXA) is currently the party behind the alleged reports on OKX. Further actions are expected to be carried out by the Financial Intelligence Unit (FIU), which is an arm of the Financial Services Commission (FSC). The probing by FIU will be done based on regulations governing the South Korean crypto market space. This will implement more rigorous regulatory measures within the crypto industry.

Amid regulatory changes, South Korea is gearing up to implement stricter cryptocurrency laws, potentially carrying harsh consequences such as life imprisonment for those found violating them.

The Financial Services Commission (FSC) announced today that breaches of the forthcoming cryptocurrency regulations, slated to take effect on July 19, could result in penalties ranging from at least one year of imprisonment to fines up to five times the illicit profits obtained.

OKBUSDT daily chart | TradingView.com
OKBUSDT daily chart | TradingView.com

Conclusion 

Lee Bok-hyun, the governor of the Financial Supervisory Service (FSS), intends to hold talks with Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), within the upcoming year.

The agenda will encompass diverse facets of the financial market, notably digital assets and the emergence of Bitcoin spot ETFs. This planned meeting comes in the wake of the SEC's recent green light for several Spot Bitcoin ETF proposals in the United States, signifying a pivotal moment in regulatory oversight.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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