More than 33,000 cryptocurrency investors in South Korea are facing a significant challenge as they are unable to access their assets totaling around $13 million. This issue stems from the closure of multiple cryptocurrency exchanges in the country, as reported by The Korea Times on October 14.
The Virtual Asset User Protection Act has led to the shutdown or temporary suspension of 14 virtual asset exchanges in South Korea. As a result, approximately 17.8 billion won, equivalent to $12.8 million, in customers’ digital assets are currently locked on these platforms.
Data released by Representative Kang Min-Kuk of the ruling People Power Party revealed that a total of 33,906 South Korean users are seeking to retrieve their assets from the affected exchanges. Out of the 14 exchanges, 11 have permanently closed their doors, while three others have temporarily halted their services.
Before ceasing operations, these exchanges collectively held 17.8 billion won in customer assets, comprising 1.41 billion won in cash and 16.4 billion won in virtual assets. Cashierest, which shut down in 2023, held the largest share of customer assets at 13 billion won, approximately $9.4 million. ProBit and Huobi followed with assets worth 2.25 billion won ($1.6 million) and 579 million won ($419,000) respectively.
Apart from the closed exchanges, an additional 30.7 billion won (approximately $22 million) is stuck in platforms that have temporarily suspended their operations. This predicament could significantly increase the number of customers with frozen assets, although the full extent of the impact remains uncertain.
Some of the exchanges involved in this situation include Oasis with 16.2 billion won ($11.7 million), Flata with 14.35 billion won ($10.3 million), and Btrade with 80 million won ($57,962).
Representative Kang highlighted that the ongoing push for regulatory compliance may further escalate these figures. He expressed concern stating, “With the virtual asset market experiencing a downturn and regulatory compliance costs escalating, more exchanges are likely to cease or suspend operations during the current renewal review process by the FSC.”
As the cryptocurrency landscape in South Korea faces these challenges, affected investors are left in limbo, eagerly awaiting resolution and access to their locked assets. The impact of these closures and suspensions underscores the importance of regulatory compliance and the need for a stable and secure environment for crypto trading in the country.