The promotion of Binance, a global virtual asset exchange, is increasing online in South Korea, raising concerns about the operations of unregistered overseas exchanges. Posts highlighting discounts on trading fees have been found to include disclosures indicating that the content was paid for, prompting questions about regulatory fairness for domestic exchanges.
According to the virtual asset industry on October 12, promotional posts encouraging new sign-ups for Binance have been appearing on domestic blogs and online cafes. These posts emphasize that new users can receive a 20% discount on trading fees.
Notably, some posts include the phrase, 'This article was written with payment from the company.' Binance has expanded its promotional activities targeting domestic media this year, leading to the emergence of these online sign-up posts.
The issue arises from the fact that Binance is an overseas exchange that has not registered with South Korea's Financial Intelligence Unit (FIU) as a virtual asset service provider. Under the current Specific Financial Information Act, even overseas operators must register with the FIU if they intend to conduct virtual asset trading targeting domestic users. The FIU considers factors such as providing a Korean-language website, supporting payments in Korean won, and marketing events aimed at Korean customers when determining whether an entity is operating domestically.
However, authorities have stated that it is necessary to verify whether these promotional posts constitute domestic business activities under the Specific Financial Information Act.
An FIU official stated, 'We are comprehensively considering various factors, including the provision of Korean-language services and active marketing, to assess domestic business activities. We need to examine whether the business directly conducted the marketing or if it was done through another entity.'
When asked about the request for these promotional posts and its stance on marketing to domestic users, Binance did not provide an official response.
Domestic exchanges are expressing concerns over regulatory disadvantages. Local operators bear the costs of complying with various regulations, including anti-money laundering systems, customer verification, and information protection. In contrast, unregistered overseas operators can secure domestic customers without significant restrictions, raising concerns about fair competition.
A representative from a domestic exchange remarked, 'While local operators comply with various regulations and obligations, if unregistered overseas exchanges are recruiting customers by offering fee discounts, it inevitably raises issues of regulatory disadvantages. There is a need to establish clear criteria for determining domestic operations.'
* This article has been translated by AI.
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