Business closed: virtual asset companies are trapped in 22.1 billion yuan, but the refund rate is only 0.3%

The user assets frozen by virtual asset operators in South Korea that have ceased operations have exceeded 22.1 billion won, but the actual refund rate is only “0.3%.” The effectiveness of the investor protection mechanism is being questioned.

22.1 billion won frozen, but refunds are minimal

According to data submitted by the Financial Supervisory Service to Rep. Kang Min-ju of the People Power Party, as of May 4th this year, a total of 15 virtual asset operators had ceased operations. These operators had a total of 1,949,742 users, with assets valued at approximately 22.11 billion won (including virtual assets and Korean won deposits) based on March 31st market prices.

The problem lies in the fact that asset refunds have hardly been realized. The “Digital Asset Protection Foundation,” established in October 2024 by the Digital Asset Exchange Association (DAXA), is responsible for receiving, safekeeping, managing, and returning user assets, but the actual results have been minimal.

Only 6 transferred to the foundation… refund rate “0.006%”

Out of all 15 companies, only 6 have transferred assets to the foundation. These operators have 1,921,493 users, with transferred assets totaling 1.94M won.

However, only 131 users have actually recovered assets through the foundation, accounting for just 0.006% of the total. The amount refunded is only 74.52 million won, representing 0.3% of all assets. In fact, the vast majority of users have not been able to recover their assets.

Looking at each operator, Paycoin has the largest user base with 1,883,692 users. The company with the largest asset scale is CP Labs, with approximately 15.05 billion won frozen.

System gaps criticized… “Mandatory asset transfer needed”

Some analysts point out that this situation stems from institutional limitations. Under current laws, ceased operators are not obligated to transfer assets to the foundation and lack enforcement measures. Additionally, notifications for user refund requests are insufficient, leading to the failure of actual refunds.

Rep. Kang Min-ju emphasized, “To protect investors’ assets, there is an urgent need for mandatory asset transfer and system improvements.” Financial authorities are also aware of the recurring issue of unreturned assets during exchange closures and are working to supplement relevant guidelines.

In the context of the continuous development of the virtual asset market, if the user protection mechanism cannot operate properly when operators exit, the trust foundation itself may be shaken. This case again highlights that South Korea’s virtual asset regulatory system still has shortcomings in “post-event protection.”

TP AI notes: A summary was generated using TokenPost.ai’s basic language model. The main content of the original article may be omitted or inconsistent with facts.