SEOUL, Dec. 20 (Korea Bizwire) – The Fair Trade Commission launched on-site inspections of cryptocurrency exchanges Wednesday to see if they comply with consumer-related laws, the government said Wednesday.
The three-day inspections follow up on an earlier package of steps aimed at curbing cryptocurrency speculation and crimes.
The measures came a day after one such exchange, YouBit, was forced to shut down after a hacking attack.
“The bankruptcy of a virtual currency exchange (YouBit) is expected to lead to financial losses for users,” the government said in a statement. “Users should exercise extraordinary precautions and wariness about the risks involved in virtual currency speculation and reckless participation in virtual currency transactions.”
The government also cautioned that virtual currency is not a “legal tender whose value is guaranteed by the central bank” and therefore its prices could fluctuate by a great deal and result in enormous losses.
Subject to the FTC’s inspections are 13 major exchanges, including Bithumb, Coinone and Korbit.
Major points of examinations are whether those virtual currency exchanges come under the category of firms required to declare as telemarketing businesses and if there is any unfair element in their terms and conditions with customers, officials said.
The Ministry of Science and ICT notified four exchanges — Bithumb, Coinone, Korbit and Upbit — that they are required to win Information Security Management System (ISMS) certifications to prove their information protection systems are secure.
Companies with annual sales of 10 billion won or more and daily online visitors of 1 million or more should receive ISMS certification.
Officials said that on-site inspections of information security systems at major cryptocurrency exchanges show that most of them have insufficient security measures.
Police and the prosecution have also been looking into whether any illegal acts are involved in virtual currency transactions. In serious cases involving a large number of victims, officials said that they will in principle put perpetrators under arrest for investigation.