This year, the original cryptocurrencies proved to be the most important cause that led to the failure of several cryptocurrency exchanges and ecosystems; The latest example of this collapse is FTX.
The Korean Financial Intelligence Unit (KoFIU), which is Korea’s authority on financial matters, noted the same when it launched an investigation into a cryptocurrency exchange regarding the listing of internally generated tokens.
Cryptocurrency exchange FTX and 130 affiliated companies have filed for bankruptcy due to a drop in the price of FTX Tokens, the company’s internal token.
Local articles state that the purpose of KoFIU’s investigation into the matter is to maintain regulatory compliance to protect investors. This happens despite the fact that Korean cryptocurrency exchanges are prohibited from releasing native tokens.
Preliminary examination shows that every cryptocurrency exchange operating in South Korea follows all applicable laws and regulations.
A representative for the Financial Services Commission (FSC) said that “there is still some uncertainty related” to the listing of tokens at home. This prompted the FSC to announce preparations to carry out a more in-depth investigation.
According to a report from regional media outlet Yonhap, Flata Exchange is one of the main suspects and is currently the subject of an investigation since listing its internal token, FLAT, in January 2020.
Authorities say major exchanges like Upbit and Bithumb are no longer under investigation; instead, they will concentrate their efforts on investigating small exchanges.