South Korea’s FTC Drops In On Cryptocurrency Exchanges

By December 22, 2017 Ethereum
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According to a press release issued jointly by several South Korean government agencies on December 20, the country's Fair Trade Commission (FTC) has sent representatives on a three-day "field survey" of the country's 13 "major" cryptocurrency exchanges. The investigations, which began the same day, are intended to uncover violations of consumer laws.

The FTC plans to "take action in accordance with relevant laws and regulations" should its searches uncover activity that merits punitive measures.

The document's signatories include the Department of Finance Policy, the Ministry of Science and Technology, the FTC, the VAT Tax Department, and the central bank. It relates that in light of cryptocurrency price fluctuations, the attack on the South Korean exchange Youbit, and that platform's consequent decision to declare bankruptcy, "It is necessary … to be vigilant about virtual currency trading."

Along these lines, the presser announced several measures in addition to the visits. According to the Ministry of Science and Technology, the exchanges Bithumb, Korbit, Coinone, and Upbit (which are among the 13 being investigated) must seek and receive "2018 Information Security Management System Certification," and are urged to enhance their security measures. The certification is required for any company "subject to sales of more than 10 billion won [over $9 million at press time] and average daily visitors of 1 million or more."

Exchanges that are not required to meet this standard will be subject to the Personal Information Management System, an "autonomous certification system that assesses the comprehensive management system of collecting, using and destroying personal information of companies."

The release also notes that the Korean Customs Service will investigate any illegal transfer of funds overseas, and that on December 15, the Ministry of Commerce, Industry and Energy sent a "letter of cooperation" to "local governments and industrial complexes" urging them to crack down on illegal cryptocurrency mining operations. The ministry intends to launch investigations on that front soon.

Finally, the document says that the Financial Supervisory Service (FSS) has "held practical consultations with banks that are planning to provide a service to establish a system for verifying the identity of [cryptocurrency exchange] users." It adds that the FSS and the Financial Services Commission, both of which are signatories, plan to inspect these systems and take measures to ensure their smooth functioning beginning in January 2018.

On December 12, the Korea Communications Commission fined the company operating Bithumb because it had failed to "comply with protective steps, making it vulnerable to hacks and causing leaks of personal data and financial damage."

Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam is a full-time staff writer for ETHNews and holds value in Ether and BTC.

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