Over 33,000 South Korean Crypto Investors Locked Out of Assets
Recent reports indicate that over 33,000 cryptocurrency investors in South Korea are facing restrictions on accessing their assets, amounting to approximately $13 million. This issue stems from the shutdown of multiple crypto exchanges within the country, as per local news outlet The Korea Times on October 14.
Impact of Exchange Closures
In total, 14 crypto exchanges in South Korea have either ceased operations or are temporarily suspending services due to compliance with the Virtual Asset User Protection Act. Consequently, an estimated 17.8 billion won (around $12.8 million) in customer digital assets are locked on these platforms.
Statistics on Affected Users
Representative Kang Min-Kuk from the ruling People Power Party released data showing that 33,906 South Korean users are attempting to reclaim their assets from the impacted exchanges. Of these, 11 exchanges have fully shut down, while three are currently suspending operations.
Details of Asset Holdings
Before their closures, these exchanges collectively managed 17.8 billion won in customer assets. This figure includes:
- 1.41 billion won in cash
- 16.4 billion won in various virtual assets
Among the affected exchanges, Cashierest, which closed in 2023, held the largest portion of customer assets, amounting to 13 billion won (approximately $9.4 million). Other notable exchanges include:
- ProBit: 2.25 billion won ($1.6 million)
- Huobi: 579 million won ($419,000)
Temporary Halts and Additional Impact
In addition to the closures, there is about 30.7 billion won (around $22 million) tied up in exchanges that have temporarily suspended operations. This situation raises concerns regarding the potential increase in customers with inaccessible funds, although precise effects remain uncertain.
Some of the exchanges that have temporarily halted services include:
- Oasis: 16.2 billion won ($11.7 million)
- Flata: 14.35 billion won ($10.3 million)
- Btrade: 80 million won ($57,962)
Regulatory Compliance Concerns
Representative Kang articulated that the current push for regulatory compliance could exacerbate the ongoing situation. He stated:
“With the virtual asset market in a slump and regulatory compliance costs on the rise, more exchanges are likely to cease or suspend operations during the ongoing renewal review process by the FSC.”
