Compelled: South Korean Crypto Exchanges Amend Terms to Make Selves Liable for Losses

South Korea FlagFollowing a recommendation made last year in April by Korea’s Fair Trade Commission, five cryptocurrency exchanges in the country have updated their terms of service to state they can be liable for losses resulting from cyberattacks or system malfunctions, YonHap News reports. 

The new language replaces previous terms stating the exchanges, including Bithumb, could only be held liable in cases of willful or gross negligence.

According to Coindesk, Bitthumb has been hacked twice, first for $31 million USD in cryptocurrencies in June 2018 and again this year in March for around $14 million.

Korean cryptocurrency trading platform Coinbin, which took over “Top Ten Korean …Exchange” Youbit last April after that exchange lost $15 million USD in a hack, declared bankruptcy and ceased all trading on February 22nd, Business Korea reported.

Up until the peak of crypto bull markets in late 2017, Korea was one of the most active, and bitcoins there were trading for “kimchi premium” that sometimes exceeded 20%.

But the turning of the tide in the ensuing bear markets revealed much malfeasance in the Korean crypto sector, which has since come under increased scrutiny by regulators and politicians.

In January, investigators from the Korean Ministry of Science, Technology and Information and the Korea Internet Development Agency (KISA) reported “weak” security at 31 0f approximately 38 crypto exchanges studied.

In the same month, the Korean Government decided to uphold a ban on ICOs (initial coin offerings) citing “high risk,” “insufficient disclosure,” “no actual service” and token price plunges of 68% immediately after privately sold coins were introduced onto public exchanges.

As well, officials from the Korean Department of Justice and the Financial Supervisory Commission held an emergency meeting May 28th to, “…examine…virtual currency market trend(s)” in the wake of recent price resurgences.

After more than a year of price doldrums stretching from the beginning of 2018 to the end of March this year, the prices of several cryptocurrencies has lately surged.

One Bitcoin currently trades for around $9700 USD, up from around $5300 in early May.

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