South Korean Exchanges Lack Security Measures

South Korean Exchanges Lack Security Measures

South Korea may be the biggest cryptocurrency market in the world but government investigations revealed some significant security-related issues. It turned that eight out 10 top exchanges were fined for not protecting customer’s personal data appropriately.

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South Korea may be the biggest cryptocurrency market in the world but government investigations revealed some significant security-related issues. It turned that eight out 10 top exchanges were fined for not protecting customer’s personal data appropriately.

The majority of South Korean cryptocurrency exchanges have been penalized $10 000 to $25 000 by the South Korea Communications Commission (KCSC). The only exception has been Bithumb, which also happens to be the second largest trading platform globally.

The eight online markets that had failed to comply with the security regulations have to pay a total of $130 000 of penalties. All of them are said to have violated the Information and Communication Network Act and Privacy Act.

KCSC together with the Ministry of Science, Technology, and Information and the South Internet Development Agency had monitored all cryptocurrency exchanges within the country from October 11 to December 28 last year. The information was presented by South Korean mainstream media outlet Yonhap News.

Surprisingly or not the top exchanges have failed to implement securities measures as legislated in the Information and Communication Act. Among those are Korbit, Coinone, Upbit, Coinplug, RippleForYou, and Coinpia.

KCSC representatives released a statement in which they explained that despite the huge trading volume that increases on a daily basis, exchanges have not invested enough in security. Many of them lack basic measures like access control device installation and operation and password storage places.

Personal data protection is among the main pain points of all crypto markets. Together Coinone and Yapan received a fine of $50 000. The reason – failing to store sensitive information, including user passwords, appropriately. Apart from that, inactive user accounts remained unsegregated for more than a year.

Similar problems were found in the third largest market in the country, Korbit. The platform does not use breach detection tools or a system that prevents server intrusion. Korbit and Upbit each received $20 000 fines. The investigation revealed Upbit operates under violation of Privacy Act.

Despite the current problems, the South Korean market remains optimistic. The investigations prove that the government is working on market regulations and they may postpone or even eliminate the need for a ban. However, KCSC representatives stated that the penalties were far too small. On the other side, this was the first time exchanges were caught violating the laws.

Now they have 30 days to improve their security.

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