Crypto Exchanges Unlawfully Withhold User Assets Post Closure
CryptoNewsTerminal Staff06 Jun, 2024
Crypto Exchanges Unlawfully Withhold User Assets Post Closure
Cryptocurrency exchanges are supposed to hold their customer's assets with the utmost care so they can return them properly in case of a shutdown. According to the Financial Intelligence Unit (FIU) and the Financial Supervisory Service (FSS) of the Financial Services Commission (FSC) in South Korea, investigations reveal that several virtual asset operators have failed to follow this protocol. An on-site inspection was conducted in the latter half of November 2022, covering 10 businesses. Of those, seven were found to have not taken the proper steps to return assets, while three demonstrated inadequate guidance to users. Specifically, guidance was only offered to users with assets of 1 million won or more and only over the phone. Furthermore, users were directed to move their funds to overseas exchanges or personal wallets, with high withdrawal fees attached. The authorities have since declared their intent to take strict action against any illegal practices stemming from this investigation.
