South Korea to impose bank-level liability on crypto exchanges after Upbit hack: Report

South Korea's cryptocurrency committee is experiencing a slowdown in progress due to the introduction of strict liability rules, which have led to a cautious approach among stakeholders in the crypto market, as reported by Kookmin Ilbo.

South Korea has tightened regulations for cryptocurrency exchanges, implementing bank-level standards in response to a significant breach at Upbit, the country's largest exchange, which resulted in a loss of approximately $36 million. This breach, linked to North Korea's Lazarus Group, has raised alarms about the security of digital assets in the region.

Coinbase and South Korean premiums are showing positive trends as Bitcoin's price stabilizes amidst December market volatility, with Bitcoin recently reclaiming the $93,000 mark after a period of bearish sentiment. This rebound indicates a potential shift in market dynamics, suggesting improved investor confidence.

A U.S. judge has requested clarification regarding the foreign charges against Do Kwon, co-founder of Terraform Labs, who faces a potential 40-year prison sentence in South Korea. This inquiry arises as Kwon is also contending with a U.S. sentence, with prosecutors seeking 12 years for his involvement in a cryptocurrency fraud case linked to significant financial losses.

South Korea is considering implementing a strict no-fault compensation law for cryptocurrency exchanges, mandating that they fully reimburse users for losses incurred due to hacks or IT failures. This proposed legislation reflects a shift towards consumer protection similar to that of traditional banking systems.

South Korea is drafting legislation to implement one of the strictest investor-protection regimes globally for cryptocurrency, requiring exchanges to fully compensate users for losses due to hacks or system failures without needing to prove negligence. This move is part of a broader initiative to enhance consumer protection in the crypto market.