In 2024 so far, over a dozen cryptocurrency exchanges in South Korea either shut down or paused their operations, leaving nearly 34,000 users with unclaimed assets totalling 17.8 billion won (approximately $13 million), according to a new report from The Korean Times.
These unclaimed assets allegedly amount to over 1.41 billion won in fiat, and 16.4 billion won in cryptocurrency.
The largest portion of these funds is held by Cashierest, which ceased operations in late 2023 and is currently the custodian of 13 billion won. Other notable exchanges include ProBit, holding 2.25 billion won, and HTX (formerly Huobi), with 579 million won. Meanwhile, three exchanges—Oasis (16.2 billion won), Flata Exchange (14.35 billion won), and Btrade (80 million won)—have temporarily suspended operations, leaving an additional 30.7 billion won locked in these platforms.
According to the report, Kang Min-kuk of the People Power Party noted that more exchanges might face closure or suspension as they undergo the Financial Services Commission’s (FSC) renewal review process. He attributed the market slump and increasing regulatory compliance costs as major reasons behind these shutdowns. Although financial authorities have provided guidelines for returning user assets, Kang acknowledged that recovering all remaining funds could be challenging.
South Korea is known for its stringent cryptocurrency regulations, and in 2024, it aimed to bolster user protection in the digital asset market amid rising concerns over stablecoins and their cross-border transactions. The FSC introduced new regulations requiring Virtual Asset Service Providers (VASPs) to separate customer deposits from operational funds, effective July 19, 2024. This measure was designed to mitigate risks of exchange insolvencies and increase user trust.
Also, the South Korean Ministry of Economy and Finance has recently been reported to be considering imposing foreign exchange controls on stablecoins. Although no specific timeline has been announced, the Financial Services Commission (FSC) is expected to prioritize stablecoin regulation and draw inspiration from regulatory frameworks established in Japan and the European Union.
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