South Korea Launches Asset Recovery Efforts for Crypto Users
South Korea is recovering assets for crypto users affected by the collapse of several exchanges, led by the newly established Digital Asset Protection Foundation. This initiative aims to return lost funds and restore trust in the digital asset industry.
A local news report indicates that the non-profit organization has begun managing assets from multiple defunct exchanges to ensure their return to affected users. It is currently collaborating with eight crypto firms for fund transfers.
Assets From Five Defunct Exchanges Under Management
Assets belonging to 40,000 users from five closed platforms, including Apro Korea, Ten & Ten, Hanbitco, Qbit, and Pay Protocol AG, have been transferred to the Foundation's management. The Foundation is negotiating with three additional operators to expand its asset recovery efforts before year-end.
The Financial Services Commission (FSC) established the Digital Asset Protection Foundation in September 2024 to address the consequences of exchange closures and facilitate user investment recovery.
Alongside working with closed exchanges, the Foundation oversees approximately 200 million won ($152,000) in fiat deposits from digital asset platforms prior to South Korea’s real-name verification system implementation. Companies like Porisdax Korea Limited, Pobble Gate, and Korea Digital Exchange are participating in this initiative.
Why the Foundation Was Created
The Foundation was formed in response to a series of exchange closures in 2024, which left around 34,000 users with unclaimed assets totaling 17.8 billion won ($13 million). These closures resulted from exchanges not complying with South Korea’s stricter crypto regulations, including those under the Virtual Asset User Protection Act.
Recognizing the need for investor protection, the FSC created the Foundation as a nonprofit entity to safeguard users and mitigate market disruptions following the abrupt closure of digital asset platforms.
Chairman Kim Jae-jin emphasized the Foundation's commitment to helping users recover their funds and assisting struggling exchanges in responsibly winding down operations. He stated, “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.”
Users can claim their funds by completing an identity verification process. Currently, requests are processed via email; however, the Foundation plans to launch a dedicated recovery platform in January 2025 to streamline the process.