Repeated cryptocurrency exchange hacks and unclear compensation for damages lead to a decline in trust.
Recently, the South Korean cryptocurrency exchange GDAC was hacked, resulting in a loss of approximately 20 billion KRW in cryptocurrencies, which is expected to deal a significant blow to the domestic virtual asset market. Experts point out that smaller cryptocurrency exchanges are likely to struggle to attract investment to cover losses due to a decline in trust following such incidents. It is also expected that compensation for consumer damages caused by hacking could take a long time.
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Pureun “Ian” Hong, managing partner at Decent Law Firm, which specializes in virtual assets, stated, “The fact that the exchange’s measures to prevent hacking were insufficient falls under internal exchange information, making it very difficult to prove. Furthermore, for financial authorities to step in for damage relief, the decision would depend on the impact it has on the financial market, which is likely to be perceived as relatively minor.”
