FTC asked to revise the adhesion contracts as they were causing problems for the user in withdrawals thereby largely compromising the consumer’s interests.
As regulatory bodies of South Korea have been working round the clock to bring crypto regulations, the Korean Fair Trade Commission (KFTC) has recently ordered 12 cryptocurrency exchanges to revise the user agreements or adhesion contracts who are said to have largely failed to protect the consumer’s interests.
The Adhesion contracts are usually referred to as the ‘boilerplate’ contracts which give the weaker party little choice in the ‘take it or leave it’ sort of agreement that is drafted by the business.
On Wednesday, the KFTC published a statement wherein it has outlined a mandate stating that is directed towards popular cryptocurrency exchanges like Korbit, Bithumb, Coinone and others. As reported by South Korean news agency Yonhap, the Fair Trade Commission says that the “existing guidelines unfairly bar users from withdrawing their deposits, or limit their services to users, and force users to shoulder all financial losses when they secede from membership.”
This latest involvement by the FTC shows that the Korean government is closely monitoring the cryptocurrency exchange ecosystem. Last month in March 2018, the Korean regulators were investigating the local banks who do business with local crypto exchanges to see whether they are implementing the anti-money laundering measures or not.
Regulatory bodies of Korea have been quite active since the beginning of 2018. Earlier in January 2018, when the Korean regulatory bodies stepped in the crypto markets for the first time there was a huge wave and sentiment of fear and panic as South Korea contributes to the most dominant investors in the digital currency market and is the third-largest country in terms of trading volumes after the U.S and Japan.
At a much recent event in Seoul, members of the crypto exchange ecosystem have pledged for self-regulating their processes in order to foster the environment for a “healthy market”. As a result, the South Korean crypto markets are seen quite active recently. One example is of Upbit, the Kakao-backed cryptocurrency exchange which recently launched a reward system for its users in order to identify the fraudulent multi-level schemes related to cryptocurrencies.
Back in January 2018, when the Korean regulatory market was quite heated up, FTC chairman Kim Sang Joo had asked for a nuanced approach while dealing with the domestic cryptocurrency space.
There was also a huge speculation about Korean likely to put a China-like ban on crypto trading activities in the country along with the complete shutdown of domestic crypto exchange. However, this was followed by a huge uproar within the Korea crypto trading and investor community and hence the government had to reconsider its decision and take it back.
At that time, FTC Chairman Kim said: “[Shutting down cryptocurrency exchanges] is not realistically possible. Based on electronic commerce law, the government does not have the authority to close down cryptocurrency trading platforms.”
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