In the past year, many cryptocurrency exchanges have failed due to native cryptocurrencies. For example, FTX recently collapsed because of this issue. Korea Financial Intelligence Unit (KoFIU) began an investigation into cryptocurrency exchanges after noticing that many of these platforms were listing their own internally created tokens.
FTX and its 130 related businesses have filed for bankruptcy due to a sudden drop in the price of their in-house token, the FTX Token. Even though Korean cryptocurrency exchanges are not allowed to release native tokens, investigations will be conducted by KoFIU to make sure protective measures for investors are being taken.
Our initial examinations showed that every cryptocurrency exchange in South Korea was following all applicable laws and regulations. However, a representative for the Financial Services Commission (FSC) said there are still some uncertainties surrounding in-house token listings. As a result, the FSC is preparing to conduct a more thorough inquiry.
Flata Exchange is one of the main reasons for an investigation that started in January 2020 due to its listing of FLAT, its own token. Major exchanges like Upbit and Bithumb are no longer under examination by authorities; instead, they would use their time more wisely by investigating smaller exchanges.