South Korea’s Digital Asset Exchange Alliance (DAXA) has formally accused the global cryptocurrency platform OKX of conducting unauthorized promotional activities within the country. OKX is alleged to have engaged South Korean investors into its Jumpstart program without the required legal registrations. DAXA, comprising the five major South Korean crypto exchanges, has taken this issue to the regulatory officials.
Alleged Promotion via Influencers
The crux of the accusation lies in OKX’s supposed use of Telegram influencers to draw South Korean cryptocurrency enthusiasts to its Jumpstart program, despite the platform not directly offering its services in the country. This move prompted DAXA to alert the authorities to the potential infringement on local regulations.
A DAXA representative clarified that the alliance itself does not possess the jurisdiction to resolve this matter and that the Financial Intelligence Unit, under the Financial Services Commission, would have the final say on the issue.
Stringent Regulatory Measures
The South Korean regulatory framework mandates that all cryptocurrency exchanges operating in the country must first secure registration before they can legally provide trading services. This requirement was underscored when the Financial Services Commission warned 27 foreign exchanges to comply with registration procedures or cease offering Korean language options.
While South Korean users can still access international crypto exchanges, the local authorities are particularly vigilant against marketing by foreign entities, transactions in Korean Won, or the provision of Korean language services.
Potential Repercussions for OKX
An investigation by the Financial Intelligence Unit is anticipated following DAXA’s report. OKX could face severe repercussions, potentially halting its South Korean operations before they gain traction. DAXA, formed after the collapse of the Terra-Luna project in 2022, represents exchanges Upbit, Bithumb, Korbit, Coinone, and Gopax, which together encompass more than 99% of domestic crypto trade volume.