Crypto

South Korea investigates crypto exchanges to list native tokens

Native cryptocurrencies have proven to be the biggest contributing factor to the demise of many exchanges and ecosystems this year, most recently during the collapse of FTX. The Korean financial authority, Korea Financial Intelligence Unit (KoFIU), has taken notice by launching an investigation into crypto exchanges regarding the list of their internal self-issued tokens.

Crypto exchange FTX and its 130 affiliates recently filed for bankruptcy due to a price crash of its internal token, FTX Token (FTT). While Korean crypto exchanges are not allowed to issue native tokens, KoFIU’s investigation of the same is to ensure regulatory compliance for investor safety, according to a local report.

Initial investigations revealed that all crypto exchanges were conducting legal operations through South Korea. However, a Financial Services Commission (FSC) spokesperson revealed plans for further investigation as “there are still doubts related” to the internal token listings.

Flata Exchange is a prime suspect and is being investigated for listing its internal token, FLAT, in January 2020, as reported by local news outlet Yonhap. Major exchanges such as Upbit and Bithumb have been cleared by authorities and investigations will focus more on smaller exchanges.

An average of 297,229 unique South Korean users visited FTX.com each month, placing South Korea at the top of the list of countries most affected by the FTX collapse, a CoinGecko analysis confirmed.

Related: South Korean prosecutors call on Terra co-founder Shin Hyun-seong for cooperation: Report

Based on suspicions of profiteering from wrongful sales of LUNA, South Korean authorities froze approximately $104.4 million (140 billion won) from FTX co-founder Shin Hyun-seong.

The Seoul Southern District Court approved the decision to freeze Shin’s assets until further investigations are concluded.