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South Korea demands that cryptocurrency exchanges modify consumer contracts

The Korea Fair Trade Commission has called for a dozen cryptocurrency exchanges to revise their consumer contracts, saying that they are failing to provide adequate protection for their users.

Written by Becky Leighton Published on

The Republic of Korea Fair Trade Commission (KFTC) is the authority for the country’s regulation for financial competition and it has put its foot down on twelve cryptocurrency exchange. Local news reports that it has “ordered 12 cryptocurrency exchanges to revise their adhesion contracts, which largely fail to provide adequate protection for consumers.”

The KFTC has noted that the guidelines in place are unfair to users – banning them from withdrawing their deposits or limiting their services and ultimately places any weight of loss onto the user’s shoulders if and when they opt out of membership. These standards are currently under the adhesion contracts, also known as ‘boilerplate’ contracts which is where the weaker party – the user in this case – is locked into a ‘take it or leave it’ agreement with the business.

Currently, the cryptocurrency guidelines are enforced via the Regulation of Standardized Contracts Act (RSCA) and the responsibility is on the business to disclose all information regarding user benefits and responsibilities – also known as the fine print. The Korean Supreme Court lined that the standard is “contractual terms that would typically affect a reasonable consumer’s decision to enter into a contract or how prices are set for the concerned transaction.”

Earlier this year Kim Sang-Joo, the authority’s chairman, had remarked about the country’s need for a thorough regulatory approach. At the time the twitters of a possible ban on all crypto-trading weren’t subtle but the fears were calmed when South Korea’s executive office released a statement to confirm otherwise.

With cryptocurrency’s sudden spike in popularity, the exchanges have had some leeway to take advantage of the unregulated space and, at times, their users. It appears that reasonable guidelines will be on the cards soon for the country’s cryptospace and users will no longer be locked into an unhappy marriage if the trading firms behave under regulation.

Written by

Internet writer looking to find the right piece. Also presents things on radio and happens to be a chip off the old blockchain. @BeckyRLeighton

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