South Korean financial authorities are looking into self-issued cryptocurrencies that may exist within local crypto exchanges following FTX.com’s FTT-led liquidity crisis.
See related article: FTX contagion in S.Korea: GOPAX halts Genesis-backed DeFi
Fast facts
- South Korea’s Financial Intelligence Unit (KoFIU) has confirmed with Forkast that they sent exchanges a request for cooperation and is examining their records of self-issued exchange tokens, which is reportedly a response to FTX Token (FTT) being the center of FTX’s liquidity crunch, which ultimately led to the exchange falling apart.
- South Korea’s Act on Reporting and Use of Specified Financial Information currently limits local exchanges from brokering the sale or exchange of virtual assets issued by itself or its affiliates.
- However, local token-to-token trading platform Flata Exchange was recently speculated to be the entity behind cryptocurrency FLAT, according to local reports. FLAT was listed on Flata Exchange in 2020 and is still being traded.
- KoFIU has reportedly confirmed that none of South Korea’s five fully licensed, fiat-to-crypto exchanges do not carry self-issued tokens, but has yet to examine the remaining 31 exchanges in the country.
- Financial authorities are also examining FTT transactions within domestic exchanges to weigh the damages caused by FTX, which reportedly store 2 billion Korean won (US$1.47 million) of FTT, local news outlets reported.
- FTX, once the world’s second-largest cryptocurrency exchange by trade volume, filed for Chapter 11 bankruptcy on Nov. 11 after it emerged that much of the collateral at its brokerage arm was based on its FTT token and amid reports it had used customer funds for trading.
See related article: South Korea, Singapore, Japan biggest users of FTX pre-collapse, says CoinGecko