South Korean Regulator Orders 12 Cryptocurrency Exchanges to Revise Contracts

Today brought two updates from the South Korean cryptocurrency industry.

Adhesion contracts

Twelve cryptocurrency exchanges in the country have been ordered to revise their adhesion contracts, according to Yonhap News.

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An adhesion contract, also known as a leonine contract, is an agreement whose terms and conditions are set by one of the parties as non-negotiable.

The Korea Fair Trade Commission, the country’s regulatory authority for economic competition, says that the exchanges in question are offering unfair terms to users. Examples listed are the barring of users from withdrawing deposits, limited services, and forcing users “to shoulder all financial losses when they secede from membership.”

Regulations

South Korean cryptocurrency regulations have been described as “totally misunderstood and confused” by one local politician. Bitcoin payments, transfers and trades have been legal in the country since July 2017, but the government has at the same time introduced a series of measures limiting the industry.

These included banning ICOs and anonymous transactions, and carrying out inspections of cryptocurrency exchanges and their associated banks. Many have also been arrested.

This despite over one-third of South Korean workers holding an average of 5,000 dollars in cryptocurrency according to CoinDesk, and millions regularly using cryptocurrency applications on their mobile phones.

Profits

This brings me to the next update, again from Yonhap News. South Korean cryptocurrency exchanges have reported enormous profits for the year 2017, according to data released today by market analytics company Vidente.

BTC Korea, the operator of Bithumb, the second-largest cryptocurrency exchange in the country, reported over 402 million dollars net profit made in 2017, which is 77 percent more than it made in the previous year.

Dunamu, which operates cryptocurrency exchange Upbit, logged profit of almost 187 million dollars. Upbit is the biggest cryptocurrency exchange in the country.

However, Upbit also reported that its volumes reached a peak in December 2017 and have since dropped.