South Korea Fines Crypto Exchanges Over Data Protection Failures

As the South Korean regulator has set a deadline for anonymous cryptocurrency accounts ban on the 30th January, South Korea fines Crypto Exchanges over data protection failures $130,000.

24 January, AtoZForex Yesterday, we reported that South Korea has set a deadline for its anonymous cryptocurrency trading accounts ban. Today, the fresh news states that the government of South Korea has issued a number of fines to local cryptocurrency exchanges for providing insufficient user data protection. The overall sum of fines issued totals at 141 million won ($130,000).

South Korea Fines Crypto Exchanges Over Data Protection Failures

The South Korea Communications Commission (KCC) has made a public announcement, where it has stated that the penalty results from an investigation that the agency has been carrying out from October to December 2017. The agency has been inspecting 10 domestic cryptocurrency exchanges.

The KCC is a ministry-level agency in South Korea that is responsible for overseeing the broadcasting and telecommunications sector. It also supervises citizens’ information protection matters.

The government has stated that among 10 surveyed companies, there were 8 that have breached the Information and Communication Network Act. This Act mandates user privacy protection practices, as per the announcement.

The officials have disclosed the names of the penalized companies. These are Upbit, Ripple4y, Coinpia, Youbit, Korbit, Coinone and Coinplug, and Eyalabs. The individual fines for the companies range from $9,000 to $14,000.

Which violations were registered by KCC?

The official announcement also outlined that critical breached have included the cases where exchanges failed to delete users’ data after they have stopped using the services for over a year. Some other exchanges, according to the announcement, have been storing users’ data outside of the country. The Chairman of KCC, Lee Hyo-Sung has stated:

“While the security threats such as virtual currency speculation and hacking of handling sites are increasing, the actual situation of personal information protection of major virtual currency exchanges is very weak. Therefore, we will try to reduce the damage of users through more strict sanctions.”

The KCC has ordered these exchanges to take actions to resolve the issues within 30 days and report back to the agency. Additionally, the regulator has stated it will draft and implement plans to manage cryptocurrency wallets, cryptocurrency transactions, and private keys to serve as administrative guidance for exchanges.

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