SK lawmaker proposes making crypto exchanges liable for hacking damages

People Power Party lawmaker Park Seong-hoon has proposed an amendment to South Korea's Virtual Asset User Protection Act that would shift the burden of proof for damages onto virtual asset service providers (VASPs), Herald Kyungjae reported. The bill would make VASPs, such as exchanges, liable for compensating users for losses resulting from incidents like hacking and system failures. To be exempt from liability, a provider would have to prove that the user was grossly negligent or intentionally at fault, or that the company had rigorously followed all security protocols to prevent the incident. The amendment also includes a provision requiring VASPs to immediately report such occurrences to financial authorities.