New Law in Korea: Exchanges Are to Be Responsible for Customers' Losses

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The five largest cryptocurrency exchanges in Korea have adopted new regulations imposed on them by FTC, the Federal Trade Commission.

A difficult year for Korea

2018 was not a good year for the entire cryptocurrency industry, but the situation was especially harsh for Korean exchanges. The previous year's losses of Bithumb, a leading exchange in that area, are estimated at 180 million dollars. This resulted in the dismissals of employees and decline of the exchange's profitability, and to make matters worse, in April there was a hacker attack during which EOS and XRP tokens with a total value of 19 million dollars were stolen. On the other hand, Bithumb and its majority shareholder, BK Kim, received funding amounting to 200 million dollars from the Japanese. It was supposed to expand the exchange's activities to Japanese and American markets.

New law for exchanges

The new regulations introduced by the commission clearly determine who is responsible for situations caused by hacking attacks or system failures. Now, according to new regulations, it's the exchange who's responsible for losses, even if it was not the company's negligence. Previous regulations used by companies such as Bithumb protected exchanges from any consequences of events that occurred out of the company's control. The new law is probably the effect of increasingly common cyber attacks on cryptocurrency exchanges in Korea. More and more reports suggest that North Korean hackers may be behind them. Security experts are of the opinion that Kim Dzong Un uses the profits from these attacks to fund his nuclear projects.