The crypto industry’s security has been compromised in more than one occasion, prompting users and investors to stay alert at all times and force crypto exchanges and financial regulators to come up with a solution in case of asset losses and other data breaches.
Regarding the case of South Korea, which is a country in which the cryptocurrency usage has gone significantly up in recent times, the financial watchdog is trying to make sure that crypto exchanges are accountable and can repay any damage that users suffer whilst using their platform.
“Corrective” Recommendations that Benefit Investors
That is why the Fair Trade Commission, or FTC, in South Korea has enforced what they call a “corrective recommendation” that will force five cryptocurrency exchanges in the country, including Bithumb, to update their terms and conditions in order to accept liability for any possible hacking attacks and related issues that may affect users.
The piece of news was reported by famous Korean news site Yonhap News Agency in recent hours. The FTC acts as South Korea’s antitrust watchdog. In the case of Bithumb, the recommendation came nearly a year ago.
Bithumb has become notoriously famous in the crypto community for being hacked twice in the last calendar year. Around this time of the year in 2018, it lost approximately $31 million worth of crypto assets, and if that was not enough, last month saw the exchange lose around $20 million worth of XRP and EOS of its holdings. Some have speculated that it may be an inside job.
Become Accountable and Improving Reputation
Before the FTC’s recommendation, the mentioned cryptocurrency exchanges had stated, in their respective Terms and Conditions’ sections, that they had no obligation of compensating users and investors unless they were found guilty of intentional or willful proceedings, or negligence.
However, and despite what it was published in its own terms and conditions’ page, Bithumb had claimed after last June’s hacking attack that it would refund all users that lost cryptocurrency assets on that dreadful sequence of events.
South Korean exchanges have been among the most cruelly hit by hackers and cybercriminals, but it all should start by tightening security measures to keep these professionals at bay. In January, just 33% of inspected crypto exchanges in the Asian nation comfortably passed government security audits.
Passing the Test
The proceedings back then consisted on government-approved agencies inspecting more than 20 crypto exchanges from September to December 2018, and there were 85 security aspects to evaluate. Seven of the 21 platforms that underwent the testing passed: Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco, and Huobi Korea.
When it comes to the usage rate of cryptocurrencies, to truly reach its vast potential, countries need to make opportunistic regulations and enforce the fulfillment of every security aspect on the exchanges’ part. That way, users and investors will feel more secure whilst trusting their valuable assets to these pages, wallets, and services.
Bithumb has not been the only Korean crypto exchange that has suffered hacking attacks or security breaches over the last calendar year; thus, it is time to offer investors some peace of mind while using local platforms.
By Andres Chavez