South Korea Regulator Asks 12 Crypto Exchanges To Amend User Rules
The move is aimed to guarantee better client protection
South Korea's competition regulator has instructed 12 local cryptocurrency exchanges to modify their adhesion contracts, as it found them not complying with consumer protection guidelines, local news agency Yonhap reported on Wednesday.
The Korea Fair Trade Commission (KFTC) has noticed that those crypto exchanges’ adhesion contracts, which clients are obliged to sign in order to use their trading platforms, unfairly bar customers from withdrawing their deposits, and even force users to bear all financial losses when they end their membership with an exchange.
The names of the 12 exchanges were not disclosed by the publication.
Digital currencies are largely popular in South Korea. According to a research by Coinhills, Korea is the third-biggest Bitcoin market in the world, behind Japan and the US. More than two million Koreans own a cryptocurrency, with people in their 20s being the most active participants.
This has prompted local regulators to interfere in the mostly unregulated crypto market globally, in an effort to protect consumers. In September 2017, the Korean government decided to prohibit domestic companies from taking part in any Initial Coin Offerings (ICOs). However, the ban has not been enforced yet and Korean investors have been able to pour money in foreign blockchain funding rounds. Moreover, the country’s financial watchdog has been working on a plan to allow ICOs upon “certain conditions”.
Earlier this year, Korea banned the use of anonymous bank accounts in cryptocurrency trades, seeking to combat money laundering activities.