Coinspeaker South Korea Begins Asset Recovery for Victims of Crypto Exchange Closures
South Korea has begun recovering assets for crypto users left stranded by the collapse of several exchanges in the country. The efforts, spearheaded by the newly formed Digital Asset Protection Foundation, promise to return lost funds and rebuild trust in the nation’s digital asset industry.
According to a local news report on Monday, the non-profit organization has already started managing assets transferred from multiple defunct exchanges, to ensure their safe return to affected users. Currently, it is working with eight crypto firms to transfer user funds.
Assets From Five Defunct Exchanges Under Management
Thus far, assets belonging to 40,000 users from five closed platforms such as Apro Korea, Ten & Ten, Hanbitco, Qbit, and Pay Protocol AG have been transferred under its management. According to the report, these assets are just the start, as the Foundation plans to finalize negotiations with three additional operators before the end of this year.
The Digital Asset Protection Foundation was established by the Financial Services Commission (FSC) in September 2024 with the aim of handling the fallout from exchange closures and ensuring users can recover their investments.
In addition to working with the closed exchanges to ensure safe return of users’ funds, the organization is currently overseeing about 200 million won ($152,000) in fiat deposits from digital asset platforms that held these funds prior to the introduction of South Korea’s real-name verification system.
Companies such as Porisdax Korea Limited, Pobble Gate, and Korea Digital Exchange are among the platforms cooperating with the initiative.
Why the Foundation Was Created
The Digital Asset Protection Foundation was established as a direct response to the chaos triggered by a wave of exchange closures in 2024. The crypto industry in South Korea saw over a dozen platforms shut down, leaving approximately 34,000 users with unclaimed assets totaling 17.8 billion won ($13 million).
The closures were as a result of exchanges’ refusal to adhere to South Korea’s stricter crypto regulations, including those introduced under the Virtual Asset User Protection Act.
Recognizing the urgent need for investor protection, the FSC established the Foundation as a nonprofit organization. Its dual purpose is to protect users and minimize market disruptions caused by the sudden collapse of digital asset platforms.
Chairman Kim Jae-jin has reaffirmed the Foundation’s commitment to ensuring users recover their funds and supporting struggling exchanges to close their operations responsibly.
“In order to protect the real rights and interests of digital asset users, we will support exchanges to fulfill their obligations to protect users and support the stable termination of business for terminating businesses,” he said.
To claim their funds, users need to complete a simple identity verification process. Currently, requests are being handled via email, but the Foundation aims to streamline the process with a dedicated recovery platform launching in January 2025.
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South Korea Begins Asset Recovery for Victims of Crypto Exchange Closures