The 16 crypto exchanges all have their headquarters outside of South Korea and are accused of conducting illegal business.In recent years, South Korea has emerged as a crypto-friendly nation, taking measures to protect its crypto community. The authorities in the country have opened an investigation into 16 crypto exchanges for 'illegally operating.' A few of these exchanges are Kucoin, MEXC, Phemex, XT.com, Bitrue, ZB.com, Bitglobal, Coinw, Coinex, AAX, Zoomex, Poloniex, BTCEX, BTCC, Digifinex, and Pionex.

The crypto exchanges named above are all headquartered outside of South Korea and have been accused of conducting illegal business.The Korea Financial Intelligence Unit is Seoul's financial intelligence unit responsible for alerting authorities about foreign crypto exchanges operating in South Korea without registration.In an order issued by the KoFIU on July 22, all foreign crypto exchanges had to disclose their identities. 16 crypto exchanges, however, failed to comply and continued to operate.

“A request has been made by the KoFIU to block domestic access to the websites of the Korea Communications Commission and the Korea Communications Standards In an official blog post, the South Korean Financial Services Commission said it would prevent the use of virtual asset services provided by unregistered entities.

It is possible for unregistered entities to be jailed for up to five years or fined KRW50 million for conducting illegal business activities.A time period may also be set for these companies to be barred from applying for operational licences in South Korea.The FSC's blog post states that "transfers of virtual assets between registered and unregistered entities will be prohibited as the authorities have issued an administrative guidance requiring a suspension of transactions."

As part of its commitment to closely monitor illegal business activities conducted by unregistered entities, the KoFIU has pledged to maintain close cooperation with relevant authorities to take necessary measures and immediately report to the investigative authority any violations.

The Asian nation will delay imposition of a 20 percent tax on crypto earnings until 2025 in order to foster its financial ecosystem for crypto companies.As part of the government's plan to support metaverse projects, South Korea plans to invest over $177 million, creating job opportunities in the sector. As a result, it is banking on the "indefinite potential" of the metaverse industry.Accordingly, the South Korean Financial Supervisory Service has decided to analyze the risks associated with domestic virtual assets to manage risks in the virtual asset market in an effort to safeguard crypto investors.