South Korean Crypto Exchanges Take On Responsibility for User Losses

South Korean Crypto Exchanges Take On Responsibility for User Losses

 
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At least five South Korean crypto exchanges have moved in recent days to change the Terms of Agreement, the Korean Herald reports. The change aims to accommodate the growing pressure from the regulators and take the portion of the responsibility in case of a cyber attack or a system malfunction.

Last year, South Korea’s Fair Trade Commission (FTC) issued a recommendation to 12 local cryptocurrency exchanges to correct specific terms that are “unduly unfavorable for their consumers.” Following the recommendations, Bithumb and four other cryptocurrency exchanges have moved to amend their Terms of Agreement.

Previously, the FTC investigated Terms of Agreement of BTC Korea (Bithumb), Korbit (Korbit), Coinnest (Coinnest), Coinone (Coinone), Dunamu (Upbit), Rootinus (Coinrail), EYA Labs (EYA Bit), Wave String (Coinis), Ripple4you (Ripple4you), Coinplug (Coinplug), Seallet (Coinpia), and Koincore (Koincore).

“Even when cryptocurrency exchanges correct their terms, consumers can still suffer from damage when the price of cryptocurrency changes due to illegal acts, speculative demands, and changes in regulations,” said Bae Hyun-Jung, section chief for FTC’s Clause Evaluation Section.

The recommendations target provisions relating to indemnity, responsibilities for management of IDs and passwords, terms on limitation in withdrawal and deposit, unsubscription of advertising information, etc.

“When consumers trade cryptocurrencies, they must make careful decisions based on their responsibilities so that they will not suffer damage in the future,” added Hyun-Jung.

The latest changes state that exchanges “will not be held accountable for compensation if there is no willful or gross negligence,” in the case of a cyber attack, for instance.

Only a few months after the FTC issued a report with recommendations, both Coinrail and Bithumb suffered significant hacking attacks, which caused the exchanges to lose $40 million and $30 million in cryptocurrencies respectively.

In similar news, one of the world’s top crypto exchanges, Binance, said it had updated terms of use agreement on June 14, following a thorough review of its know-your-customer (KYC) and anti-money laundering (AML) procedures.