Crypto assets frozen for thousands of South Korean investors

The disruptions stem from the new Virtual Asset User Protection Act, which aims to improve market security but has led to significant challenges for the crypto industry.

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Over 33,000 crypto investors in South Korea are facing frozen assets valued at nearly $13 million after multiple exchanges shut down due to regulatory changes. Fourteen virtual asset platforms have either closed or temporarily halted operations, impacted by the new Virtual Asset User Protection Act, which aims to enhance security in South Korea’s crypto market.

The closures, which include major players such as Cashierest, ProBit, and Huobi, have left investors unable to access funds held in both digital and cash forms. Cashierest alone held around $9.4 million in user assets before its shutdown, while exchanges like ProBit and Huobi stored an additional $2 million.

This asset freeze may expand as other exchanges, including Oasis and Flata, currently hold substantial funds while undergoing service suspension. Representative Kang Min-Kuk has highlighted that regulatory costs are adding strain to the already weakened virtual asset market, increasing the likelihood of further closures as the Financial Services Commission undertakes its compliance assessment process.