TechFlow news, September 26 — According to Cointelegraph, the South Korean Financial Services Commission (FSC) has approved the establishment of a Digital Asset User Protection Foundation by the Joint Consultative Group of Digital Asset Exchanges (DAXA). The foundation aims to assist collapsed cryptocurrency exchanges in reimbursing users. It is expected to begin operations in October 2024. Statistics from the FSC show that out of 22 cryptocurrency exchanges in South Korea, 10 have shut down and three have suspended operations, raising concerns over user fund safety.
The foundation will negotiate with exchanges to receive user funds and virtual assets, selecting banks to safeguard cash while entrusted virtual assets will be managed by normally operating exchanges. The foundation’s operation committee will consist of representatives from banks, exchanges, government agencies, and private-sector experts. The South Korean government will support the foundation and guide potentially failing exchanges in transferring customer assets to it. This initiative is among the follow-up measures to South Korea's "Virtual Asset User Protection Act," which took effect on July 19, 2024.
