SOUTH KOREA: Crypto Exchanges MUST BE HELD ACCOUNTABLE LIKE BANKS!
After the Upbit exchange hack (loss of $36M), South Korea is implementing a major regulatory overhaul, pushing cryptocurrency exchanges into an era of strict management like traditional financial institutions.
⚡️ THE BIGGEST CHANGES:
1. Compensation "Regardless of Fault": Exchanges will be required to fully compensate users for losses due to hacks or system failures, even if the fault is not entirely the exchange's.
- Meaning: This imposes a banking-level legal liability standard on crypto exchanges.
2. Huge Penalties: The maximum penalty for security incidents will increase to 3% of the exchange's Annual Revenue, eliminating the old cap.
3. Tightening AML (Anti-Money Laundering):
- Expanded Travel Rule: The identity verification rule will apply to even small transactions under 1 million Won to prevent transaction splitting to evade the law.
- Account freezing authority: The Financial Intelligence Agency will have the authority to freeze accounts immediately in cases of serious suspicion.
👉 Conclusion: South Korea's goal is to enhance user protection, raise information security standards (IT security), and increase transparency in the industry, preparing to become a major digital asset hub.
