Financial Authorities Require Cryptocurrency Exchanges to Secure Insurance, Even for Closed Businesses
CryptoNewsTerminal Staff12 Aug, 2024
Financial Authorities Require Cryptocurrency Exchanges to Secure Insurance, Even for Closed Businesses
Financial authorities in South Korea have implemented a new regulation requiring virtual asset exchanges, including those that have ceased operations, to subscribe to insurance policies. This move aims to safeguard user assets in the event of security breaches or other incidents, even after the exchanges have closed down. According to News 1, the Financial Services Commission has instructed exchanges that recently suspended their operations to obtain insurance coverage. Several exchanges, such as Zidac and Hanbitco, have already complied with the directive. Others, like Huobi Korea, are considering following suit. The requirement for insurance in the virtual asset industry became mandatory last month with the enforcement of the Virtual Asset Service Providers Act. This regulation aims to enhance the protection of user funds and promote transparency in the cryptocurrency market.
