Gov’t doubles down on bitcoin

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Gov’t doubles down on bitcoin

After a recent spate of scams and hacking at Korean cryptocurrency exchanges forced one operator to file for bankruptcy, the government came up with stronger measures to enhance cybersecurity and protect investors’ information on Wednesday.

The Ministry of Science and ICT will make it mandatory for the country’s four largest cryptocurrency exchanges - Bithumb, Coinone, Korbit and Upbeat - to be certified under the so-called Information Security Management System. Exchanges will have to prove that they provide adequate security for information.

The certification is required for exchanges with 10 billion won ($9.3 million) in revenue and over a million visitors a day. Even after exchanges attain certification, the ministry will monitor their security every year to check if they still meet standards.

On Tuesday, a Korean cryptocurrency exchange called Youbit filed for bankruptcy after it was hacked earlier in the morning, becoming the first exchange to close due to a hack. Youbit said it lost roughly 17 percent of its assets, amounting to 17 billion won.

The case once again raised concern about the vulnerable systems of cryptocurrency exchanges.

The ministry plans to designate an information security officer for each exchange to constantly monitor how they upgrade their security. The ministry believes the contact point will allow them to more quickly respond to hacking threats and other problems.

In a broader investigation of existing exchanges, the Fair Trade Commission began a three-day investigation Wednesday of 13 major cryptocurrency exchanges to see whether any of them violated laws on e-commerce and consumer protection.

The commission will mainly look at whether the exchanges should register as e-commerce operators and whether any of their business terms were unfair for customers. Based on the investigation, the Fair Trade Commission plans to come up with suitable measures against violators.

The Korea Communications Commission plans to adopt a policy that enables it to temporarily halt operations at exchanges when danger or a threat is spotted. It will also strengthen penalties against operators that fail to secure the information of their users.

In cases where private information was leaked due to lax security, the commission will consider allowing investors to take class action against exchanges.

The ministry has begun investigating the Youbit hacking incident to pinpoint the cause and is collaborating with the National Police Agency’s cyber crime unit.

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