Financial Authorities Conduct Comprehensive Investigation of 'Self-Issued Coins' by Virtual Asset Exchanges

Checking Exchange FTT Holdings Status
Monitoring Deposit and Withdrawal Times by Unit on Gopax Exchange

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] As the cause of the bankruptcy of the global virtual asset exchange FTX was pointed out to be its 'self-issued coin' FTT, financial authorities have launched a full-scale investigation into the status of self-issued coins at domestic exchanges. With some suspicious cases also reported at domestic virtual asset exchanges, the financial authorities have started close monitoring.

According to the financial sector on the 20th, the Financial Intelligence Unit (FIU) under the Financial Services Commission sent a written cooperation request to all domestic virtual asset exchanges on the 17th to investigate the handling status of self-issued coins.

According to Article 10-20 of the Enforcement Decree of the Special Act on Reporting and Using Specified Financial Transaction Information (Special Act on Reporting), virtual asset service providers are prohibited from mediating, brokering, or acting on the sale or exchange of virtual assets issued by themselves or their special related parties.

On the 16th, representatives of the five major domestic virtual asset exchanges (Dunamu, Bithumb, Coinone, Korbit, Streami) explained at a meeting with the FIU that "The essence of the FTX incident was that the management improperly used customer assets and abused their self-issued coin FTT," adding, "In Korea, self-issued coins are restricted under the Special Act on Reporting, so it is unlikely that an incident like FTX would occur."

However, recently, suspicions have arisen that the cryptocurrency 'Flat' (FLAT), listed on the coin market exchange 'Platta Exchange' (PlattaEX) on January 3, 2020, corresponds to a self-issued coin, prompting financial authorities to conduct a re-inspection.

The FIU confirmed that there are no self-issued coins in the inspection of the five major domestic virtual asset exchanges that have contracts with banks for real-name account issuance, but inspections of other coin market exchanges have not yet been conducted.

The financial authorities are also conducting a full inspection of the status of FTT traded through domestic virtual asset exchanges recently. According to the virtual asset industry, the total amount of FTT held by domestic virtual asset exchanges is known to be about 2 billion KRW, but a financial authority official stated that since this amount reflects the market capitalization at the time of aggregation, it is difficult to interpret it as an investment amount or damage amount.

This content was produced with the assistance of AI translation services.