Fair Trade Commission Recommends Correction of Unfair Terms to 8 Cryptocurrency Exchanges

[Sejong=Asia Economy Reporter Kwon Haeyoung] It has been revealed that major cryptocurrency exchanges have included unfair clauses in their terms and conditions, such as revising terms to the detriment of customers, notifying them for only a short period, and considering customers to have agreed if they do not explicitly express their consent.

The Fair Trade Commission announced on the 28th that after reviewing the terms and conditions of eight major virtual asset service providers (cryptocurrency exchanges) including Bithumb Korea (Bithumb), Dunamu (Upbit), Korbit, and Coinone, it found 15 types of unfair clauses and issued corrective recommendations.

According to the investigation, these companies stipulated in their terms that when revising terms to include content unfavorable to customers, they would notify customers 7 or 30 days in advance and consider customers to have agreed if there was no explicit expression of consent.

The Fair Trade Commission deemed these clauses invalid as they are unfairly disadvantageous to customers. When important content affecting customers’ rights or obligations is changed, individual notification is required, and the 7-day notification period is unreasonably short. It also judged that it is wrong for customers to be deemed to have agreed to clauses that may result in unfavorable outcomes without their knowledge.

The terms also stipulated that matters not specified or interpretations would be governed by separately established operational policies by the company. The Fair Trade Commission pointed out that the content and scope are excessively broad, making prediction difficult, and that operators could arbitrarily manage operational policies, thus requiring correction. It also found unfair the clauses stating that the company is not responsible for disadvantages arising from members not notifying the company of changes or not confirming the company’s notifications, or for transactions conducted between linked sites and members. This is because it excludes legal liability arising from the operator’s intentional or gross negligence and shifts risks that should be borne by the operator onto customers.

Meanwhile, in April, the Fair Trade Commission conducted an ex officio investigation into the terms and conditions of 16 exchanges that received Information Security Management System (ISMS) certification. The commission first conducted on-site investigations of the eight major exchanges with large scale and issued corrective recommendations for unfair terms. If the exchanges do not accept the recommendations, the commission will issue corrective orders after a resolution. The remaining eight companies underwent a written investigation, and after completing the review, the commission plans to complete measures regarding unfair clauses within the year.