South Korea Enforces ‘No-Fault Liability’ Rule for Crypto Exchanges

CoinRank, a well-known platform for crypto analytics, has announced a fully protected and interesting statement regarding crypto assets from the South Korean government. The main purpose ‘No-Fault Liability’ rule is to force the crypto exchanges to take full security control over the digital assets of users in South Korea.

⚡️LATEST: SOUTH KOREA CONSIDERS “NO-FAULT LIABILITY” RULE FOR CRYPTO EXCHANGESKorea may require exchanges to compensate users for losses from hacks or system failures even without operator fault. Penalties could rise to up to 3% of revenue under proposed legislation.via… pic.twitter.com/SzxndkEAce

— CoinRank (@CoinRank_io) December 7, 2025

South Korea rolls out a no-fault compensation model for crypto exchanges, which means crypto exchanges are fully responsible for the security of crypto assets in case of scams or hacks. Basically, it is a strategic effort to make the security unbreakable and for user satisfaction. CoinRank has released this news through its official X account.

FSC Enforces No-Fault Liability, Raising Accountability for Crypto Exchanges

The Financial Services Commission (FSC) brings no-fault liability rules into action. Under these new rules, crypto exchanges will have to abide by the same rules as traditional banks. In the past, a massive amount of 104 billion Solana-based tokens were shifted to external wallets in only hours.

According to the new rules, Crypto exchanges are answerable to consumers for any loss, such as hacks, scams, or any wrong in a user’s account. This action will provide a kind of relief for users to get rid of taking care of their crypto assets. In addition, penalties would be raised to 3% of revenue under proposed legislation.

Korean Crypto Market Faces Consolidation amid High Compliance Costs

As per the details shared by CoinRank, crypto exchanges need to upgrade their systems to meet advanced security requirements to comply with users’ account security. In all this, big exchanges would get the no-fault compensation model as an advanced edge. Smaller ones might not be able to absorb the costs, due to market consolidation.

On the other hand, this advancement brings lots of facilities for larger exchanges with minimal choices for consumers. In a nutshell, South Korea’s no-fault compensation model for crypto exchanges marks a landmark shift in the regulatory landscape.