Koreans Paid Offshore Exchanges an Estimated $3.5 Billion in Fees Last Year. Seoul Just Blocked 27 of Them

According to Tiger Research, Korean traders paid foreign crypto exchanges roughly $3.5 billion in fees in 2025.

Now a lot of those exchanges are about to go dark in Korea.

On October 13, 2026, South Korea’s Financial Intelligence Unit (FIU) said it’s blocking the websites of 27 unregistered crypto exchanges and service providers. That includes KuCoin, MEXC, BitMart, Phemex, BingX, CoinW, BTCC, DigiFinex and Bitrue.

The app stores came first. Now it’s the web.

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What Happened

The Korea Media and Communications Standards Commission approved the blocks after reviews on October 6 and 7, and the FIU announced them on Tuesday.

How it works:

• Sites run from overseas get their access blocked inside Korea.
• Services hosted in Korea get shut down outright.
• None of them are registered under Korea’s anti-money-laundering law, the Act on Reporting and Using Specified Financial Transaction Information. To legally serve Korean users, a foreign exchange has to register with the FIU and pass its security and AML requirements.

How does Seoul decide whether an offshore exchange is “targeting” Koreans? According to Cointelegraph, it looks for Korean-language service, marketing aimed at Koreans, or support for won transactions.

From the FIU, via Cointelegraph:

“Blocking measures against illegal virtual asset operators will also apply to internet websites, following apps such as those on Apple and Google.”

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The Part That Should Worry Offshore Venues

This isn’t a one-time list. The rules have changed.

Per CoinDesk, regulators can now ask for a block as soon as they detect unregistered activity. They don’t need a court ruling or any evidence that customers lost money. Mirror sites that pop up at new addresses will get blocked too.

The FIU has also referred 44 unregistered operators to investigators. BeInCrypto reports that operating without registration can mean up to five years in prison or a 50 million won fine.

For comparison, 28 virtual asset service providers are currently registered with the FIU.

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Why the App Bans Weren’t Enough

Korea has been trying this for a while:

• March 2025: Google Play restricted 17 unregistered exchange apps, including KuCoin and MEXC.
• April 2025: Apple blocked downloads and updates for 14 of them.

The money kept leaving anyway:

• An estimated $110 billion moved off domestic exchanges in 2025, according to CoinDesk.
• Tiger Research and Chainalysis estimate that about 700 trillion won went from Korean to overseas exchanges between 2021 and 2026. That number counts only traceable routes and includes a projection for this year.
• Korean-owned wallets have put roughly $1.64 billion into Hyperliquid, Lighter and Variational since January 2024, per Tiger Research.
• Net stablecoin outflows from Korea’s big exchanges had run for 18 straight months as of June.

Meanwhile, crypto held on Korean exchanges lost 33% of its market value in the first half of 2026 compared with the second half of 2025, falling to 58.9 trillion won.

The regulator’s case is about fees. A June probe by DAXA (the Digital Asset eXchange Alliance) and the registered exchanges found that flagged offshore platforms charged average fees of 1.5% to 10%. The five largest won-based exchanges in Korea average 0.16%. At the high end, that’s up to 62 times more.

Our read: if the offshore venues cost more, people weren’t going there to save money. The more likely reasons are leverage, perps and long-tail listings that Korean exchanges don’t offer.

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If You Have Funds on One of These Exchanges

The FIU is blunt about it: withdraw now. It admits the blocks could make withdrawals harder for existing users. It says it’ll provide withdrawal guidance through DAXA, with the operators’ cooperation. It hasn’t said how long the blocks will last or set any registration deadline.

KuCoin told BeInCrypto that “Compliance remains central to KuCoin’s business strategy” and that “User assets remain safe and secure.” MEXC, BitMart, BingX and Phemex didn’t respond to requests for comment from CoinDesk or BeInCrypto.

This all happens while Korea’s Digital Asset Basic Law, which is supposed to set rules for issuance, trading, custody and supervision, still hasn’t taken effect.

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Why This Matters for Crypto Jobs

In Korea, compliance now decides who gets to operate. You can’t buy or market your way into one of the world’s most active retail markets anymore. You need FIU registration and an AML program that passes review. Expect exchanges that want to get in to hire Korea-specific compliance, AML and licensing staff, and expect them to pay a premium for people who’ve dealt with the FIU before.

Korea-facing roles at the 27 blocked exchanges are at risk. Korean-language support, local marketing, community and BD jobs exist to do exactly what regulators now treat as targeting Korean users. If Korea is a big part of your book of business at one of these exchanges, plan for those roles to shrink or move.

Registered domestic exchanges could get a hiring bump. If even some of that offshore volume comes back, Upbit, Bithumb and the rest of the 28 registered VASPs will need more listings, risk, support and product staff. Korean-speaking engineers and ops people who know the local rules become very valuable.

Website blocking is becoming a standard regulatory tool. First app stores, now domains, and no court ruling needed. Other regulators are watching. Anyone in growth or GTM at an offshore exchange should expect “geo-compliance” to become its own job category.

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The Bottom Line

Korean traders kept sending billions to offshore exchanges, and regulators kept losing ground. Blocking the apps didn’t work, so Seoul is now blocking the websites, and it no longer has to prove anyone got hurt first.

Whether the money returns to Upbit or simply moves to VPNs and DEXs, offshore exchanges don’t have a free run in Korea anymore.

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Want to work somewhere that won’t get geo-blocked next quarter? Licensed, compliance-first crypto teams are hiring across engineering, legal, AML and product. Browse open roles on Cryptogrind →