5 South Korean Crypto Exchanges Take On New Responsibility for User Losses
The Fair Trade Commission originally asked Bithumb and four other platforms to increase liability in 2018.
Five cryptocurrency exchanges in South Korea have increased their liability to users in line with demands from regulators. Local English-language news outlet The Korea Herald reported the news on June 17, citing Yonhap News Agency.
A year after the Fair Trade Commission requested Bithumb and four other platforms to adapt their policy, the companies will now hold themselves accountable in the event of user funds being stolen.
The onus for paying out will lie with the exchanges even if no willful or gross negligence occurred on their part, The Korea Herald stated.
Previously, exchanges only reimbursed users if it was proven that their own systems were at fault.
The changes are pertinent for the domestic exchange sector, with Bithumb among those which suffered hacks of user funds over the past year.
Late last month, a phishing scam targeting users of South Korean exchange Upbit appeared to be the work of North Korean state actors.
At the same time, many South Korean exchanges were reporting gross losses for 2018 as the cryptocurrency bear market took hold, with data showing only Upbit making a profit. Coinnest, another exchange, shut down altogether in May.