Millions left in limbo as Korean crypto exchanges shut down amid regulations: report

More than a dozen crypto exchanges in South Korea have closed or suspended operations in 2024, leaving nearly $13 million in assets unclaimed by almost 34,000 subscribers.

As South Korea enforces the Virtual Asset User Protection Act, more than a dozen crypto exchanges have shut down in 2024, leaving customers with 17.8 billion won ($12.8 million) in inaccessible assets.

According to data from the Financial Services Commission, 11 exchanges have permanently ceased operations, while three others have temporarily suspended services in late September, The Korea Times reports.

As a result, nearly 34,000 crypto owners are now seeking to reclaim cash and crypto from the closed exchanges, which hold a combined total of 17.8 billion won, broken down into 1.41 billion won in cashable assets and 16.4 billion won in crypto, the report reads.

South Korean crypto exchange Cashierest, which shut down in late 2023, emerged as the largest custodian of customer assets, holding 13 billion won, followed by ProBit with 2.25 billion won and HTX (formerly Huobi) with 579 million won. Meanwhile, approximately 30.7 billion won remain locked in three exchanges that have temporarily halted operations: Oasis (16.2 billion won), Flata Exchange (14.35 billion won), and Btrade (80 million won).

Rep. Kang Min-kuk of the ruling People Power Party said more trading platforms are “likely to cease or suspend their operations during the ongoing renewal review process by the FSC” as the market is in a slump and regulatory compliance costs are on the rise. While financial authorities have issued guidelines to facilitate the return of user assets, achieving the successful recovery of all remaining funds may be challenging, Kang admitted.