What did South Korea's DAXA uncover during its investigation?

South Korea's Digital Asset eXchange Alliance (DAXA) and licensed Virtual Asset Service Providers identified 12 illegal cryptocurrency operators during a joint investigation. The findings have been referred to law enforcement authorities for further action.

Why were the 12 crypto operators considered illegal?

The operators were allegedly running unregistered over-the-counter (OTC) cryptocurrency businesses without obtaining the licences required under South Korean law. Crypto service providers must register with financial authorities to operate legally in the country.

How much were these illegal operators charging in fees?

Investigators found that some of the unregistered platforms charged fees up to 62 times higher than those charged by regulated domestic cryptocurrency exchanges. These excessive fees significantly increased trading costs for users.

What is DAXA and what role does it play?

DAXA is a self-regulatory organisation formed by South Korea's major cryptocurrency exchanges. It works with licensed Virtual Asset Service Providers to improve compliance, monitor suspicious activity and support industry standards.

What are Virtual Asset Service Providers (VASPs)?

VASPs are companies that provide cryptocurrency-related services such as trading, custody and asset transfers. In South Korea, VASPs must register with regulators and comply with anti-money laundering and consumer protection requirements.

Why are unlicensed crypto operators risky for investors?

Unlicensed platforms often lack basic safeguards such as customer asset protections, transparent fee structures and formal dispute resolution processes. Users may face greater risks of fraud, financial loss or difficulty recovering funds.

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South Korea flags 12 illegal crypto operators

Written by Brie CarterPublished Jun 10, 2026, 3:21 AM

South Korea's Digital Asset eXchange Alliance (DAXA) and registered Virtual Asset Service Providers (VASPs) have uncovered 12 illegal cryptocurrency operators during their first joint enforcement investigation.

According to local reports, the entities were operating unregistered over-the-counter crypto trading businesses outside South Korea's regulatory framework and have now been reported to law enforcement authorities.

Investigators found that some of the illegal operators charged transaction fees up to 62 times higher than those imposed by licensed domestic cryptocurrency exchanges.

The findings highlight ongoing concerns about unregulated crypto businesses that operate without the consumer protections required under South Korea's virtual asset laws.

DAXA, a self-regulatory body formed by the country's major cryptocurrency exchanges, has been working alongside licensed VASPs to identify suspicious activity and improve compliance across the sector.

South Korea requires crypto service providers to register with financial authorities, and regulators have steadily increased oversight of the industry following a series of high-profile digital asset failures and market disruptions.

The latest investigation underscores the government's efforts to strengthen investor protections and eliminate illegal trading platforms, while warning traders about the risks of using unlicensed operators that may expose users to excessive fees, fraud and limited avenues for dispute resolution.