- Initial investigations showed that all cryptocurrency exchanges in South Korea operated legally.
- Investigations will be more focused on smaller exchanges.
The investigation into cryptocurrency exchanges concerning the listing of their internally-issued tokens has been launched by the Korea Financial Intelligence Unit (KoFIU), South Korea’s authority on financial matters.
A price drop in its token, FTX Token, led to the bankruptcy filing of the cryptocurrency exchange FTX and its 130 associate companies. According to a local report, KoFIU is looking at native tokens even though Korean crypto exchanges are not allowed to issue them to maintain regulatory conformity for investor protection.
More Attention on Smaller Exchanges
There are still some questions related to in-house token listings, according to a Financial Services Commission (FSC) official, therefore preparations for a more thorough inquiry have been made public. Investigations are being conducted into Flata Exchange, one of the main suspects, for listing its token, FLAT, back in January 2020. Investigators will pay more attention to smaller exchanges now that major exchanges like Upbit and Bithumb have been given the all-clear by the government.
According to some sources, South Korea was among the nations that were most negatively impacted by FTX’s collapse. On a monthly average, 297,229 unique South Korean users visited FTX.com. South Korean authorities froze roughly $104.4 million (140 billion won) from FTX co-founder Shin Hyun-Seong because he may have benefited from unauthorized LUNA sales. The decision to freeze Shin’s assets up until the end of additional investigations was approved by the Seoul Southern District Court.