A heavy fine of 141 million won ($130,000) has been imposed on the domestic cryptocurrency exchanges in South Korea. The government of South Korea took this crucial step on January 24, 2018, due to privacy failures. These domestic crypto exchanges were the roots for providing inadequate data protection to the users.
According to the reports, eight companies have been penalized. These eight companies include Upbit, Ripple4y, Coinpia, Youbit, Korbit, Coinone, Coinplug, and Eyalabs. All these companies were providing a cryptocurrency wallet services to the users.
The Korea Communication Commission (KCC) announced the reason for the imposition of such a heavy fine. The commission conducted an investigation from October 10 to December 28 in 2017 against ten domestic crypto exchange companies. During the survey, it was evaluated that out of those ten companies the above mentioned eight were found blameworthy. These eight companies were violating the Information and Communication Network Act. This violation was responsible for disrupting the user privacy and protection methods. According to the agency, each company has been imposed a fine in the range of $9,000 to $14,000.
The Chairman of KCC Lee Hyo-Sung stated that “While the security risks like virtual currency speculation and hacking of managing sites are increasing, the current scenario of major virtual currency exchanges is very weak. Therefore, we will try to reduce the damage to the users through some more strict sanctions.”
KCC has strictly ordered the exchanges to resolve the security issues within a time period of 30 days and file proper reports. Apart from this, the regulator of the agency said that it would ensure the implementation of the strategies pertaining to the management of cryptocurrency wallets, private keys, crypto transactions and other privacy affairs.