[South Korea Proposes Legislation Requiring Crypto Exchanges to Bear No-Fault Compensation Liability] The South Korean government is advancing legislation to introduce a 'no-fault compensation' rule for major cryptocurrency exchanges, requiring virtual asset service providers to bear compensation liability for user losses caused by hacking incidents or system failures, even if no fault is found. Currently, such compensation rules only apply to traditional financial institutions and electronic payment companies. This policy initiative stems from a security incident on the Upbit platform on November 27, where approximately 44.5 billion KRW (around $30.1 million) worth of assets were transferred to external wallets. Data shows that from the beginning of 2023 to September of this year, the five major exchanges experienced a total of 20 system failures, resulting in cumulative losses of approximately 5 billion KRW, with Upbit accounting for 6 incidents and losses of about 3 billion KRW. The draft also proposes raising technical security requirements and increasing the maximum fine for hacking incidents to 3% of annual revenue. Regulatory authorities are currently investigating Upbit's delayed reporting of the incident.
--
24/7 Flashes
More >Today 2025-12-07