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Bithumb, South Korea's bitcoin exchange, has been punished with a penalty of 60 million won for disclosing customer information twice

Bithumb, South Korea's largest Bitcoin exchange, has been penalized by its operator for communications by the Korea Communications Commission for allegedly revealing the user's private data. This marks the first time that the South Korean government has taken punitive measures against the currency exchange.

First punitive action against cryptocurrency exchange

The KCC held a meeting on Tuesday, announcing that Bithumb was penalized for allegedly revealing user private data. Yonhap reported that the case is also South Korea's first punitive measures for encrypted currency exchange.

It is reported that South Korea's Communications Commission decided to punish Bithumb operator BTC total 60 million won (about 54,970 US dollars).

In addition, the agency was also recommended to punish the person responsible for the exchange, KCC has ordered Bithumb to establish measures to ensure that similar things will not happen in the future.

Currently, the won market is the third largest market for Bitcoin, while Bithumb accounts for nearly 80% of South Korea's market. In August this year, the Bithumb Exchange surpassed Kosdaq, the country's leading securities exchange.

KCC explained that according to the current information and communications network law, the fines are calculated on the basis of the average daily trading volume (approximately 2.72 billion won) of BTC for the period from 2014 to 2016. However, critics argue that this calculation Is not appropriate because the recent volume of transactions at the Bithumb Exchange has risen sharply.

KCC said it plans to amend the bill and increase penalties for companies disclosing customer privacy in the future.

Bithumb data has leaked

According to KCC, hackers have twice stolen personal information from Bithumb users. The survey, conducted by the Korea Internet Security Authority (KISA), revealed that Bithumb had leaked 31,506 customers' information in April and 3,434 customers in June.

"We consider that these two attacks were caused by the use of hacking, either directly or indirectly, by Bithumb's failure to comply with the safeguards and the user's personal information was compromised," KCC explained.

An official of the agency said:

"Punitive measures are taken because operators fail to comply with safeguards that make them vulnerable to hacker attacks, causing personal data and financial losses to users."

Regulation in progress

At present, the cryptocurrency exchange in Korea is largely unregulated. Cryptocurrencies are not recognized by regulatory authorities as financial products and there are no rules to protect investors.

In view of the rapidly increasing volume of cryptocurrencies in South Korea, the South Korean government is actively discussing the relevant regulatory rules.