The South Korean government and local financial authorities have warned investors about the emergence of fake crypto and exchanges.
On December 13th, the South Korean government and its working group responsible for the state of the crypto market in the country held an extraordinary meeting. The group is made up of employees of the Ministry of Finance, the Ministry of Justice, the Financial Supervision Commission and other state bodies. The purpose of the meeting was to discuss the current market situation as well as to offer a number of projects related to both business and investor regulation.
Several of the regulations discussed at the meeting were:
- Prevent foreigners and underage investors from trading on the local market.
-Properly regulating the exchange of crypto blocks, such as allowing only legitimate providers of financial services to operate on the market.
In view of the rapidly growing number of counterfeit exchanges and other fraudulent platforms, the South Korean government has quickly shifted its attention to the regulation of the crypto market.
Last week, for example, several exchanges were revealed for fraud and handed over to local financial authorities. One of the fake exchanges was BitKRX, called the Korea Exchange (KRX), the largest trading platform in South Korea. BitKRX was advertised as a subsidiary of KRX, thus attracting users and promoting its business as a legitimate and regulated business set up by KRX.
Chosun, one of the country's leading media, has revealed that local financial and law enforcement authorities have taken action against exchanges involving misleading marketing. National authorities have revealed that several exchanges remain unregulated due to misappropriation of the names of leading financial institutions.
One of the members of the South Korean Battle Association told Chosun that there are people who are not experienced enough to work with large-scale exchanges, so they resort to the local market. "But it often turns out that these local traders are not able to execute their orders in a timely manner, and this leads to big losses for investors," he added.
Earlier this week, Bithumb said that the right set of regulations for businesses and investors can only help the market and boost its growth.
For stock exchanges such as Bithumb, which operate with millions of dollars a day, regulations are a necessity because many investors become victims of Ponzi schemes and other types of fraud. This month, local law enforcement officials unveiled the Ponzi $ 200 million scheme. 14 people from Mining Max, a cloud-based mining system, were arrested by economic police with several charges, including financial fraud in, particularly large sizes.
According to CryptoCompare, the South Korean crypto market accounted for only 4.6 percent of the world, ranked 4th after the US, Japan, and Europe. In this small market, fraud can easily be avoided if investors watch and trade only through regulated platforms and exchanges.
image source - Instagram