January 24, 20182min708

Total of $130,000 in fines to South Korean cryptocurrency exchanges

Domestic cryptocurrency exchanges in South Korea have been issued a fine for providing insufficient user data protection.

In a public announcement, the Korea Communications Commission (KCC) said the penalty is a result of an investigation that the agency conducted from Oct. 10 to Dec. 28 in 2017 across 10 domestic crypto exchanges. Launched as a ministry-level agency, KCC is responsible for regulating the broadcasting and telecommunications sector, as well citizen’s information protection.

Among the 10 surveyed companies, eight were violating the Information and Communication Network Act. The act mandates user privacy protection methods, according to the announcement.

The eight penalized companies are: Upbit, Ripple4y, Coinpia, Youbit, Korbit, Coinone and Coinplug, as well as Eyalabs, a cryptocurrency wallet service. According to the agency, the individual fines range from $9,000 to $14,000.

The announcement details that critical violations include some exchanges failing to delete users’ data even when they had stopped using the service for over a year. And some others storing users’ data outside of the country.

KCC chairman Lee Hyo-Sung said:

“While the security threats such as virtual currency speculation and hacking of handling sites are increasing, the actual situation of personal information protection of major virtual currency exchanges is very weak. Therefore, we will try to reduce the damage of users through more strict sanctions.”

The amount of the individual fines may not be significant. But the move arrives just a day after the country’s financial watchdog set a date for the formal cessation of anonymous cryptocurrency trading. This is yet another signal of the effort underway by the country’s authorities to increase regulation of cryptocurrency exchanges.

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