South Korea probes crypto exchanges for local tokens

Rebeca Moen  Nov 20, 2022 12:55  UTC 04:55

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This year, native cryptocurrencies proved to be the most significant cause that led to the failure of a number of cryptocurrency exchanges and ecosystems; the most recent instance of this was the collapse of the FTX.

The Korea Financial Intelligence Unit (KoFIU), which is Korea's authority on financial matters, took note of the same thing when it initiated an investigation into cryptocurrency exchanges in regard to listing their own internally created tokens.

The cryptocurrency exchange FTX and its 130 affiliated enterprises have just filed for bankruptcy as a result of a drop in the price of the FTX Token, the company's in-house token.

A local article states that the purpose of KoFIU's investigation into the matter is to maintain regulatory compliance for the protection of investors. This is the case despite the fact that Korean cryptocurrency exchanges are prohibited from releasing native tokens.

Initial examinations indicated that every cryptocurrency exchange operating inside South Korea followed all applicable laws and regulations.

A representative for the Financial Services Commission (FSC) said that "there are still some uncertainties linked" to in-house token listings. This prompted the FSC to announce preparations to conduct a more in-depth inquiry.

According to a report by the regional media outlet Yonhap, Flata Exchange is one of the key suspects and is now the subject of an investigation since it listed its in-house token, FLAT, in January 2020.

Authorities have said that major exchanges like Upbit and Bithumb are no longer under investigation; instead, they would concentrate their efforts on investigating smaller exchanges.

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