Millions left in limbo as Korean crypto exchanges shut down amid regulations: report

In 2024, more than a dozen cryptocurrency exchanges in South Korea have shut down or suspended operations, leaving nearly $13 million in assets locked up and unclaimed by about 34,000 users.

The closures have come as part of South Korea’s enforcement of the Virtual Asset User Protection Act. According to data from the Financial Services Commission (FSC), 11 exchanges have permanently ceased their operations, while three others suspended services in late September, as reported by The Korea Times.

As a result, 17.8 billion won (approximately $12.8 million) of customer assets are now inaccessible, with 1.41 billion won in cash and 16.4 billion won in crypto caught in these exchanges.

The largest of the shut-down exchanges is Cashierest, which closed at the end of 2023, and holds 13 billion won in customer funds. Other exchanges with significant amounts of user assets include ProBit, holding 2.25 billion won, and HTX (formerly Huobi), which retains 579 million won. Meanwhile, three exchanges that temporarily halted services—Oasis, Flata Exchange, and Btrade—are currently holding an additional 30.7 billion won in user funds.

A member of the South Korean National Assembly, Rep. Kang Min-kuk, stated that more platforms are likely to close or suspend operations as the FSC continues its renewal review process. He noted that the crypto market slump and rising regulatory compliance costs are contributing factors to the closures. While the FSC has issued guidelines aimed at facilitating the return of user assets, Kang acknowledged that recovering all the locked funds could be challenging.