South Korean Regulator Warned Forthcoming Crypto Exchange Rule May Threaten User Data

A South Korean regulator has warned that forthcoming crypto exchange-governing could leave sensitive data about customers compromised due to a legal problem.

According to a report from Kookmin Ilbo, another financial regulator, the Financial Intelligence Unit (FIU), which will police exchanges as of March 25, is concerned about the fate of user data from exchanges who ultimately fail to obtain licenses. South Korean law requires that companies purge their databases and safely delete sensitive user data within six months of no longer needing to access it.

However, in the case of firms that go out of business or end up in limbo after having their license requests turned down, the FIU is concerned that data could be compromised or left unaccounted for.

The FIU thus advised crypto exchanges to hold off on requesting such user data from customers until their applications are either approved or rejected. Unscrupulous players may also take advantage of the issue, posing as bona fide exchanges in a bid to collect “hundreds of thousands of social security numbers,” the report’s author noted.

By Amy Liu

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