Following the liquidity crisis caused by FTX.com’s FTT, South Korean financial regulators are investigating any self-issued cryptocurrencies that may be present on regional crypto exchanges.
As a result of FTX Token (FTT) being at the epicenter of FTX’s liquidity crunch, which ultimately caused the exchange to collapse, South Korea’s Financial Intelligence Unit (KoFIU) has reportedly confirmed that they sent exchanges a request for cooperation and are looking into their records of self-issued exchange tokens.
The sale or exchange of virtual assets issued by itself or its affiliates is currently prohibited by South Korea’s Act on Reporting and Use of Specified Financial Information.
Local news sources have speculated that the organization behind the cryptocurrency FLAT was the local token-to-token trading platform Flata Exchange. In 2020, FLAT was listed on Flata Exchange and is still traded today.
However, KoFIU has not yet looked into the remaining 31 exchanges in the nation. KoFIU has reportedly confirmed that none of South Korea’s five fully licensed, fiat-to-crypto exchanges carry self-issued tokens.
Financial regulators are also investigating FTT transactions made on domestic exchanges in order to assess the harm done by FTX, which is said to store FTT worth 2 billion Korean won ($1.47 million), according to local news sources.
After it was discovered that much of the collateral at its brokerage arm was based on its FTT token and amid claims that it had utilized customer funds for trading, FTX, once the second-largest cryptocurrency exchange in the world by transaction volume, filed for Chapter 11 bankruptcy on November 11.