2024

when

Investors in South Korea’s booming cryptocurrency market are facing a digital dust storm after a shocking revelation by financial regulators.<a href="https://www.koreatimes.co.kr/www/biz/2024/06/126_376175.html?fbclid=IwZXh0bgNhZW0CMTAAAR1OhXpzSioL8PbSnxfaAVcl680rnGDsXjr4Uil1Qtfx0dwwXfSxfz8LFnM_aem_AXp8_Pmyb2S-_MVJFvePXPDteGVXZ1vEwjilfTZJS2s0mXU_08dkxBW69XUmvF8HQN8egiX85Tze9_xmevohehZY" target="_blank" rel="noopener nofollow"> A joint study</a> by the Financial Supervisory Service (FSS) and the Korea Financial Intelligence Unit (FIU) found that a staggering 70% of shuttered crypto exchanges left their customers hanging, failing to return invested funds. 
<h2 id="strong-the-hidden-risks-of-lesser-known-coins-strong">The Hidden Risks Of Lesser-Known Coins</h2> This news comes as a gut punch to over 6 million Koreans, roughly 10% of the population, who have dipped their toes into the crypto pool. Unlike their global counterparts, Korean investors are known to dabble in riskier, lesser-known cryptocurrencies in addition to established names like<a href="https://www.coingecko.com/en/coins/bitcoin" rel="nofollow noopener" target="_blank"> Bitcoin.</a> 
The report paints <a href="https://www.eblockmedia.com/news/articleView.html?idxno=3234" rel="nofollow noopener" target="_blank">a grim picture of the industry’s practices</a>. Many of these defunct exchanges didn’t even bother to warn users before pulling the plug, leaving them scrambling to salvage their investments. Even in cases where some form of notification was issued, the withdrawal process was described as an “extreme inconvenience” with a skeleton crew tasked with handling a potentially overwhelming number of claims. 
<blockquote class="twitter-tweet"> 
 Seven out of 10 cryptocurrency exchanges in Korea fail to return investors’ money when they shut down or suspend operation, according to financial authorities, Friday. (Korea Times) <a href="https://t.co/ws2wtzd2qu" rel="nofollow" target="_blank">https://t.co/ws2wtzd2qu</a> 
 — Financial Services Commission – FSC Korea (@FSC_Korea) <a href="https://twitter.com/FSC_Korea/status/1798989045663703082?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">June 7, 2024</a>
</blockquote> 
<h2 id="strong-stern-warning-to-ceos-strong">Stern Warning To CEOs</h2> 
The FSS is scrambling to shore up trust in the digital asset market. They’ve pledged to work closely with other financial watchdogs to develop stricter regulations for closing down financial firms, particularly crypto exchanges. They’ve also issued a stern warning to CEOs of digital asset service providers, reminding them to comply with the upcoming Virtual Asset Investor Protection Law, set to take effect in July. 
While the potential for high returns is undeniable, the risks associated with a largely unregulated market are becoming increasingly apparent. As the FSS wrestles with crafting a regulatory lasso, Korean crypto investors would be wise to tread cautiously, or risk getting caught in the next digital stampede. 
<img loading="lazy" decoding="async" class="size-full" src="https://www.tradingview.com/x/VGw3fpfP/" width="1835" height="883"> Police Bust South Korean Scammers 
Adding to the chaos, South Korean law enforcement recently arrested 19 individuals connected to a deceptive <a href="https://bitcoinist.com/south-korea-busts-crypto-scam-19-arrested/" target="_blank" rel="noopener ">“crypto reading room”</a> scam that defrauded over 300 investors of $19 million. Operating on platforms like Telegram, the gang posed as crypto experts to lure victims with promising tips and fake endorsements. 
They used fake apps linked to bogus exchanges, enticing victims with initial gains before imposing fabricated “withdrawal fees” and cutting off communication. The investigation also uncovered a disturbing recruitment tactic called “pig-butchering,” where victims were promised jobs in Myanmar but were forced into the fraudulent operation upon arrival. 
Featured image from The Korea Herald, chart from TradingView

Crypto Chaos: 70% Of Dead Korean Exchanges Leave Investors High And Dry

Table of Contents

Bitcoinist

Other articles published on Jun 8, 2024

Apple supercharging Siri and iOS with ‘Apple Intelligence’ and OpenAI

Two Years After Gaining Over $145M, Shiba Inu Whale Buys Additional SHIB Tokens; These Other Meme...

Flokita Team is proud to present: Flokita Swap

27.78 Billion Dogecoin (DOGE) in 24 Hours Stacked by Whales, What's Happening?

Ripple CTO Backs Craig Wright In Satoshi Trial But There’s A Twist

Experts Predict a November Valuation of $0.25 for MBAG as MoonBag Crypto Beat Dogeverse, VeChain ...

Join our free newsletter for daily crypto updates!