South Korean Police Launch Crackdown on Unregistered Crypto OTC Operators

South Korean police have launched a concentrated crackdown on unregistered over-the-counter cryptocurrency operators, citing risks including personal data leaks, money laundering and the concealment of criminal proceeds.

The National Office of Investigation, the investigative arm of the Korean National Police Agency, said the Digital Asset eXchange Alliance, or DAXA, asked authorities on June 9 to investigate 12 unregistered OTC trading firms, Asia Economy reported on June 16.

Police said illegal OTC crypto trading conducted as a business without the required registration has recently become widespread. Authorities plan to step up enforcement through cyber investigation units at provincial and metropolitan police agencies.

OTC crypto trading allows buyers and sellers to trade digital assets directly without going through an exchange. When companies operate such businesses without meeting legal procedures and registration requirements, user safeguards are limited and the risk of personal data exposure increases.

Police are also concerned that illegal OTC exchanges could be used for money laundering or to hide criminal proceeds. The anonymity and informal structure of such trades can help convert illicit funds into crypto assets or evade tracking, authorities said.

The Korean National Police Agency said its Cyber Terror Response Division at headquarters will direct enforcement by regional cyber investigation units. It also plans to continue cooperating with DAXA, including through information sharing, as it strengthens its response to illegal OTC crypto trading.