Two South Korean Crypto Exchanges Operating Without Insurance Coverage

BitcoinWorld

Two South Korean Crypto Exchanges Operating Without Insurance Coverage

Two cryptocurrency exchanges operating in South Korea, Guardian Holdings and CoreDAX, were found to be without insurance coverage as of Aug. 14, according to data disclosed by the Financial Supervisory Service (FSS) and reported by Maeil Business TV. The information, requested by lawmaker Park Sang-hyuk of the Democratic Party, was provided on Sept. 2 and highlights a potential gap in investor protection within the country’s digital asset market.

Background: Insurance lapse at Guardian Holdings and CoreDAX

Both exchanges had previously held insurance policies providing 500 million won (approximately $370,000) in coverage for one year, starting July 19 of last year. However, these policies were not renewed upon expiration, leaving the exchanges without any external insurance for the period in question. In contrast, the other 26 operators in the country have either purchased insurance with coverage of at least 500 million won or set aside internal reserves to cover potential losses.

The lapse raises concerns about the level of protection available to customers in the event of a security breach, system failure, or other incidents that could result in financial loss. While South Korea’s regulatory framework has been tightening around cryptocurrency exchanges, insurance coverage remains a key component of safeguarding user assets.