So far, just under half of all cryptocurrencies and fiat have been recovered – converted to fiat and withdrawn through banks or transferred to other exchanges – from South Korean exchanges that were shut down last month, but $1.8 Million has still not surfaced two weeks after the closure.
As previously reported, numerous exchanges were forced to close on Sept. 25 After the country enacted some of the world’s strictest regulations on trading platforms. They were forced to get an Information Security Management System (ISMS) certificate from the government’s IT agency in order to offer cryptocurrency trading, and they had to authenticate themselves as real-name banking partners if they also wanted to offer paper money trading.
Of that number, the Segye Ilbo reports, 13 platforms “attempted to obtain ISMS certification but failed” – and were forced to close as a result. According to the Financial Intelligence Unit (FIU), these platforms held cash and coins worth a total of $3.5 Million.
But now, more than two weeks later, only USD 1.76 Million has been recovered.
The FIU says it is working with investigative agencies to “respond to concerns” that some exchanges may try to avoid repaying their customers “if they cease operations.”
Exchanges that were shut down Sept. 25 Were ordered to remain in operation for 30 days to refund money to their customers – and customers were told to hurry up and withdraw their money from those platforms.
The media company pointed out that “some exchanges” had experienced “server issues” that caused delays.
The FIU, however, could be looking at a far thornier problem: “planned bankruptcies,” in which companies try to legally declare themselves unable to repay their customers.
So far, no such bankruptcies have been reported to financial authorities, but the fact that so many cryptocurrencies and fiat funds are still unclaimed or refunded is a cause for grave concern.
A total of 36 exchanges closed completely on September 25, including the aforementioned 13 that had not received ISMS certification. Twenty-three others did not even apply for ISMS certification – creating another potential minefield of unreimbursed cryptocurrencies and fiat.
Only two trading platforms (Upbit and Korbit) have received FIU operating licenses for fiat markets so far, with competitors Bithumb and Coinone also awaiting the results of their own applications.
Another group of 25 exchanges received ISMS certification, allowing them to offer crypto-to-crypto services.