On 25th July, South Korean officials made it clear that the country’s governing bodies must come together to enforce cryptocurrency regulations. This comes in the wake of major hacks that has threatened to destabilize the financial markets as well as dissuade people from adopting cryptocurrencies on a larger scale.
South Korea is making a steady progress to implement the country’s first government-issued bill that will exclusively deal with cryptocurrencies. The officials have openly stated that the existing cryptocurrency exchanges might be basking in the bullish run occurring in the market right now but they are still plagued with security loopholes and flimsy financial redundancies.
Hong Seong-ki, the virtual currency response team head at South Korea’s Financial Services Commission stated:
“While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security. We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible”
Cryptocurrency analysts say that the bill will be imperative in creating a fortified cryptocurrency exchange system in South Korea which, according to reports, generates one of the highest volumes in the world. The hacks that created waves in the South Korean crypto community majorly affected the Bitcoin [BTC] and Ethereum [ETH] savings of users prompting a nationwide appeal for cryptocurrency policy changes.
Hack Episode 1
In June of this year Coinrail, a cryptocurrency exchange in South Korea revealed that hackers had made away with almost $40 million in stolen cryptocurrencies. Post the hack, the exchange did not disclose the specific amounts that each coin lost but rather just took the names of the coins affected. The list of stolen cryptocurrencies includes token from the Pundi X project, ATC from Aston and the NPER project’s NPER token.
Pundi X had also released a blog post that revealed a few other statistics:
“The hacker may have stolen 1,927 ETH, 2.6 billion NPXS, 93 million ATX and 831 million DENT coins, as well as significant amounts of six other tokens.”
Hack Episode 2
June gave the South Korean cryptosphere another reason to ensure ‘crypto safety’. Bithumb, a South Korean cryptocurrency exchange released a statement saying that hackers had stolen over $32 million worth of cryptocurrencies with XRP being one of the major coins affected.
The company, post the hack halted cryptocurrency deposits and withdrawals on the platform. The exchange had also compensated for all the loss incurred by the users and moved all investor assets to a cold wallet. A cold wallet is a type of digital wallet that is not connected to the internet and therefore, in theory, unhackable.
The South Korean government’s bill would see all cryptocurrency exchanges in the country working under the mandate of the Financial Services Commission. Officials have promised the cryptocurrency community that once the bill is passed, the body will use its power to strengthen the security measures and not to promote its own agendas.
Hong Seong-ki, however, had one statement: “I wouldn’t recommend putting money in cryptocurrencies,”