The post Korea Signals Strict New Era for Crypto Firms: Mandatory Compensation, Bigger Fines appeared on BitcoinEthereumNews.com.

Regulations South Korea’s regulators are signaling a dramatic shift in how digital-asset platforms will be treated under the law. Instead of viewing crypto exchanges as technology companies operating in a gray zone, policymakers are now pushing to classify them under rules normally reserved for banks and major payment institutions — and that includes full responsibility for user losses even when the platform itself is not to blame. Key Takeaways South Korea is preparing bank-style “no-fault” liability rules for crypto exchanges. A surge of outages and the Upbit incident pushed lawmakers toward stronger consumer protections. Proposed penalties may reach 3% of annual revenue — far higher than today’s fixed fines. A separate stablecoin bill faces a December 10 deadline amid political pressure.  Recurring Exchange Failures Force Regulators to Rethink the Rules The turning point has not been a single incident but an accumulation of failures. According to data delivered to lawmakers, Korea’s biggest exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — collectively suffered 20 service disruptions since last year. More than 900 users were affected, and losses exceeded 5 billion won.For regulators, the pattern indicates that system fragility, not isolated mistakes, is the problem. The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have concluded that voluntary safeguards are no longer sufficient, and exchanges must now meet standards closer to those that govern the banking sector. The Upbit Breach Becomes the Catalyst — but Not for the Reason Most Expect Although the late-November Upbit breach drew widespread attention, the fallout had more to do with the exchange’s response than the hack itself. More than 104 billion won worth of Solana-based tokens left Upbit wallets in under an hour. The technical failure was serious — but lawmakers were equally focused on the lag in reporting. Nearly six hours passed before…

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Filed under: News - @ December 7, 2025 7:22 pm