The Korea Herald released reports on June 17, explaining that five cryptocurrency exchanges in South Korea have increased their liability to users. The actions were taken in accordance with demands from regulators.
Five cryptocurrency exchanges to be held accountable in situations of stolen funds.
Last year, Bithumb and four other platforms adopted policies from the Fair Trade Commission. As a result, these companies will be held accountable in the event of user funds being stolen. The responsibility for paying out will be with the exchanges even if there’s no willful or gross negligence on their part, Korea Herald reported.
Prior to the implementation of the policy, exchanges were expected to reimburse users only when it’s proven that their own systems were at fault. On the bright side, the changes are crucial for the domestic exchange sector, with Bithumb among those who suffered loss of user funds following hacks.
Based on reports from Cointelegraph, there will be increasing security for South Korean platforms. This is as a result of the increased risk of cyberattacks from neighbors, North Korea.
In May, a phishing scam aimed at users of South Korean exchange, Upbit, was discovered to be from North Korean state actors. Concurrently, many South Korean exchanges were reporting gross losses for 2018. Although, this resulted from the cryptocurrency bear market. Data revealed only Upbit made a profit. Crypto exchanges like Coinnest went out of business in May.