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- South Korea will block offshore crypto apps that fail to secure mandatory FIU registration.
- Foreign exchanges must establish local entities and obtain ISMS certification to stay active.
- New rules strengthen local platforms as DeFi options grow and fake crypto app scams rise.
South Korea is preparing to block offshore crypto apps as Google Play enforces new compliance rules on January 28. The change targets foreign exchanges that operate without registration under the Financial Intelligence Unit (FIU). It will also affect wallet services that do not meet the country’s regulatory standards.
Google Play will require foreign crypto exchanges to register with the FIU before their apps can remain available. The platform issued a warning to developers, threatening to remove noncompliant apps from the Korean market. Local media reports confirm that unregistered crypto apps will not receive updates or remain listed. This includes major global exchanges that offer services to Korean users.
Foreign exchanges must create a domestic corporation to meet the new rules. They must also obtain an Information Security Management System (ISMS) certification. These steps ensure that platforms follow anti-money laundering requirements under South Korean law. The process is detailed and takes time to complete.
Google Play Enforces Strict Compliance for Crypto Platforms
Blockchain expert Park Hyeon-yeong said that overseas exchanges must obtain registration as a virtual asset service provider to appear on Google Play. She noted that the approval requires full document verification from the FIU. A simple filing will not be accepted. This makes continued app availability difficult for foreign operators.
Google clarified that all crypto apps must follow country-specific laws to remain accessible. The company said developers must upload a “Report Repair Complete” file through the Developer Studio system. Without approval, installations and updates will stop. Apps will then be blocked for all users in South Korea.
Local regulators are also increasing oversight of domestic exchanges. Officials have begun inspections and shareholder eligibility checks. These reviews are part of the broader compliance framework under the Financial Services Commission. The same standards will apply to foreign platforms that seek approval.
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The restrictions may give local exchanges such as Upbit and Bithumb a stronger position. They already operate under domestic rules and hold ISMS certification. With foreign apps facing removal, local platforms may see increased trading activity. Investors who rely on derivatives markets may face reduced access due to limits on foreign platforms.
Users Turn to DeFi as App Store Limits Expand
Some users may explore decentralized finance platforms as an alternative. These services do not rely on app stores. Regulators cannot guarantee this shift, as it depends on individual user behavior. Foreign exchanges may also consider partnerships with licensed Korean companies. Binance partnered with Gopax in the past, but derivatives remain banned in South Korea.
The Google Play update is timed when fake apps are growing in the world’s app stores. A more recent alert on X has raised awareness of counterfeit trading apps in the Apple App Store. Two users lost $28,000 in downloading fraudulent tools. Fraudsters would use expired developer accounts to impersonate genuine Web3 apps.
South Korea is still revising its overall policies on digital assets. Last year, the country removed a nine-year corporate crypto investment ban. The top 20 cryptos are now accessible to public companies and institutions within the cap of 5% of equity investment. The Financial Services Commission is also drafting new regulations for Bitcoin spot ETFs and the Digital Asset Act.
The new policy by South Korea on apps will increase the control of the crypto market. Additionally, it will encourage foreign operators to adhere to the nation’s standards. Those platforms, which do not conform, will lose access to one of the most vibrant digital asset markets in Asia.
Also Read: Eric Adams Denies Allegations of NYC Token Fraud Amid Liquidity Concerns
