South Korean MP Wants to Launch a Fund to Help Struggling Crypto Investors

Exchange Investment Regulation South Korea
Author
Author
Tim Alper
About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Last updated: 
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: AdobeStock / orpheus26

 

A South Korean politician wants the government to create a special fund to help crypto investors who have suffered losses in the markets – and says that crypto exchanges should foot the bill.

News1 reported that Kim Byung-wook, an MP for the opposition Democratic Party, told a group of blockchain industry leaders and financial regulators at a summit that leading trading platforms should launch an “investor protection fund.”

He was quoted as saying:

“If exchanges created [such] a fund, the market would develop more soundly and investors would enjoy greater protection – even before new legal measures are introduced.”

The government has repeatedly spoken about the need to boost crypto investor protection after thousands of citizens sustained heavy financial losses at the start of the bear market in May. The “LUNAC/Terra incident,” as South Korean lawmakers and media professionals have dubbed it, is likely to become a catalyst for major regulatory reform.

The government has stated that it will create a special bill to regulate the market – and will place investor protection at the heart of this new law.

However, Kim warned that Seoul should not become too focused on protecting investors. He stated that overly restrictive efforts would stifle the crypto industry’s ability to grow.

Kim added:

“If we only focus on the negative aspects of the cryptocurrency market, domestic wealth could flow abroad. Simply suppressing the domestic market will not stop people from investing [in crypto].”

He added that politicians and regulators now “need to approach [crypto] futures and margin trading from a new perspective.”

And Kim added that the previous government’s legislative attempts to stop non-Koreans from using domestic exchanges were misguided.

He called for an urgent review of this policy, hinting that barring overseas crypto users from making use of South Korean trading platforms was doing little to help the domestic crypto sector grow.

Meanwhile, in an exclusive article, Seoul Kyungjae reported that Uprise, a domestic crypto firm that has previously received backing from the internet giant Kakao and the banking heavyweights Shinhan and Kookmin, lost an eye-watering 99% of its clients’ funds by betting big on LUNAC futures prior to May’s cataclysmic crash.

The AI technology had taken a short position on LUNAC at the exact time of the crash, the media outlet explained, but sudden pumps that followed the initial price slump sealed the bet’s fate.

Uprise, which hinted that it may consider attempting to compensate its customers, blamed the incident on “unexpectedly high levels of volatility in the market.”

Uprise had billed itself as a crypto futures trading platform that made use of AI-powered bot technology. But its bots were powerless to stop some USD 20 million worth of client funds from going up in smoke.

The firm had claimed that removing the human element from crypto trading could “minimize” crypto-related “risk,” but, as the newspaper put it, “even AI technology had no choice but to incur losses when unprecedented turbulence hit the market” as LUNAC crashed in early May.

The media outlet concluded that “skepticism” about the bot and AI-powered technology “in the cryptoasset market” was “expected to grow in the future.”

____

Learn more: 
New South Korean Regulatory Chief Promises More ‘Fairness’ for Crypto Investors
South Korean Crypto Exchanges Prepared to Self-regulate, Says Ruling Party

Media & Police Investigate Crypto Links as Family Found Dead in South Korean Sea
South Korean Bankruptcy Court Warns of Coming Surge in Crypto-related Cases

Neobank K-Bank May Have to Postpone IPO Plan as Crypto Winter Bites
Terraform Officials Banned from Leaving South Korea as Do Kwon ‘May Apply for Singaporean Citizenship’

Logo

Why Trust Cryptonews

2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors
editors
+ 66 More

Best Crypto ICOs

Discover trending tokens still in presale — early-stage picks with potential

Explore Our Tools

Smart tools made for everyday crypto users

Market Overview

  • 7d
  • 1m
  • 1y
Market Cap
$3,435,227,268,289
-3.53
Trending Crypto

More Articles

Bitcoin News
Metaplanet Issues Fresh $210M Bonds to Evo Fund, ‘All Bitcoin,’ Says CEO
Sujha Sundararajan
Sujha Sundararajan
2025-06-16 05:25:50
Blockchain News
Michael Saylor Extends Hand to Pakistan’s Crypto Ambition — Which Other Execs Are Involved?
Shalini Nagarajan
Shalini Nagarajan
2025-06-16 05:21:09
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors