Sixteen foreign cryptocurrency exchanges, including KuCoin and the Mexican heavyweight MEXC, have been fined by South Korean financial authorities for failing to follow local regulations and chasing domestic consumers without operating authorization.

As previously reported, officials filed letters to 27 cryptocurrency exchanges, alleging that they intentionally target South Koreans. They warned the companies that they would face penalties if they continued to pursue South Korean consumers aggressively.

Legal measures established last year allow all cryptocurrency exchanges operating on South Korean land to apply for licenses. This complex procedure includes getting information management accreditation from a government-run technology organization and negotiating partnerships with domestic banking partners. It is an almost tricky undertaking for any company not situated in South Korea.

And although many South Korean crypto investors continue to utilize offshore crypto exchanges using VPNs and other workarounds, authorities have advised deals from aggressively seeking South Korean consumers.

The Financial Intelligence Unit (FIU), which legislates the nation's crypto exchanges and controls operating permit applications, has requested that formal investigations launch into the group of 16 deals, including Phemex, XT.com, Bitrue, ZB.com, Bitglobal, and CoinW.

The gang established Korean-language websites and advertised to South Koreans. It even assisted consumers in purchasing tokens using local credit and debit cards.

The FIU said it had already warned the exchangers about their behavior. Moreover, it said it would report the companies to the relevant authorities in the countries where their financial operations are based. It would, after that, prohibit domestic access to their websites.

The unit has directed the government's internet and media censors, the Korea Communications Commission, and the Korea Communications Standards Commission to "ban all access to these firms in South Korea." Banks and credit card providers will also be required to "ban payment services" to the 16 exchanges.

Anybody proven to be engaged in the undocumented sale or acquisition of crypto assets in South Korea faces up to five years in prison and penalties of up to USD 38,000.

A similar approach is in Japan, where the authority has routinely notified foreign crypto trading sites that provide Japanese-language services or take payments from local banks or credit cards.

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