South Korea's Crypto Exchanges Left Exposed Without Mandatory Insurance

Two South Korean cryptocurrency exchanges, Guardian Holdings and CoreDAX, have been operating without insurance coverage as of August 14. According to data disclosed by the Financial Supervisory Service (FSS) on September 2, these exchanges had previously held insurance policies providing 500 million won (approximately $370,000) in coverage for one year, but they were not renewed upon expiration.

The lapse raises concerns about the level of protection available to customers in the event of a security breach or system failure. In contrast, the other 26 operators in the country have either purchased insurance with coverage of at least 500 million won or set aside internal reserves to cover potential losses.

The lack of coverage at Guardian Holdings and CoreDAX could expose users to higher risk, especially if these exchanges experience a security incident. This situation underscores the need for more consistent regulatory requirements to ensure all exchanges provide a baseline level of protection to their customers.