South Korean crypto exchanges fail to return funds in 70% of cases when closing
09.06.2024
South Korean regulators conducted a study and found that in 70% of cases, users do not get their funds back when local cryptocurrency exchanges close or suspend payments. The Financial Supervisory Service (FSS) and the Financial Intelligence Unit (FIU) analyzed 10 companies, of which only three returned money to their clients. The remaining seven exchanges either did not pay anything or issued insignificant compensation.Experts noted that six companies did not even notify clients about the upcoming closure. In some cases, the return of funds was handled by only one or two employees, creating inconveniences for users.South Korea is the third-largest digital asset market in the world, with over 10% of the country's population engaging in cryptocurrency transactions. In response, the FSS is developing recommendations to tighten regulations for crypto exchanges. FSS representatives announced their intention to continue combating illegal activities in this sector and to develop a specialized legal framework.FSS representatives stated their commitment to continue fighting fraud and other illegal activities in the digital asset market. They emphasized the importance of creating transparent and fair conditions for all market participants. "We are working on appropriate recommendations and will continue to focus on eradicating illegal activities in the growing digital asset market," the FSS stated.In addition, South Korean authorities are considering revising the ban on cryptocurrency ETFs, which could stimulate further market development and attract new investors. These measures aim to increase trust in cryptocurrency platforms and ensure the stability of the financial sector.Thus, the FSS and FIU study highlights the need for strict regulation and oversight of cryptocurrency exchanges to protect users and ensure transparency in operations on one of the world's largest digital asset markets.
