South Korea’s Financial Intelligence Unit launches investigation around cryptocurrency exchanges for listing native tokens | The Financial Express

South Korea’s Financial Intelligence Unit launches investigation around cryptocurrency exchanges for listing native tokens

According to Cointelegraph, cryptocurrency exchange FTX and its 130 affiliate firms recently applied for bankruptcy on account of a price crash of its in-house token, FTX token

South Korea’s Financial Intelligence Unit launches investigation around cryptocurrency exchanges for listing native tokens
South Korean authorities froze around $104.4 million (140 billion won) from Shin Hyun-seong, co-founder, FTX

It is believed that native cryptocurrencies came out as the biggest factor behind the downfall of many exchanges and ecosystems this year, most recently during the FTX collapse. Reportedly, Korea Financial Intelligence Unit (KoFIU), the Korean financial authority, has launched a probe into cryptocurrency exchanges with regard to their in-house, self-issued tokens, as stated by Cointelegraph.

According to Cointelegraph, cryptocurrency exchange FTX and its 130 affiliate firms recently applied for bankruptcy on account of a price crash of its in-house token, FTX token. The aim behind KoFIU’s investigation is to ensure regulatory adherence for with regard to investors’ safety, insights from a local report showed. Initial investigations revealed that all cryptocurrency exchanges conducted lawful operations across South Korea. However, a Financial Services Commission (FSC) spokesperson stated plans for a thorough investigation because “there are still some doubts related” to in-house token listings. 

On the basis of information by Cointelegraph, Flats Exchange is considered to be a suspect and is being subjected to investigations for listing its in-house token, FLAT, in January, 2020. Major exchanges such as Upbit and Bithumb have received clearance from the authorities and the investigations are expected to be directed towards smaller exchanges. 

Moreover, Cointelegraph noted that on the grounds of suspicion of profiting from unauthorised LUNA sales, South Korean authorities froze around $104.4 million (140 billion won) from Shin Hyun-seong, co-founder, FTX. Its is believed that Seoul Southern District Court gave approval for freezing Hyun-seong’s assets until further investigations reach a conclusion.

(With insights from Cointelegraph)

Also Read: Hedge fund manager Bill Ackman remains optimistic about cryptocurrencies despite FTX collapse

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First published on: 21-11-2022 at 17:01 IST