According to ChainCatcher, citing Yonhap News, data obtained by South Korean National Assembly member Kang Min-guk from the Financial Supervisory Service shows that, as of May 4, a total of 15 virtual asset service providers have ceased operations in South Korea, affecting approximately 1.949 million users and freezing assets worth KRW 22.1 billion (USD 14.87 million). Of these, only six operators have transferred user assets to the Digital Asset Protection Foundation, covering 1.92 million users and assets totaling approximately KRW 2.36 billion (USD 15.9 million). Only 131 users—0.006% of all affected users—have successfully recovered assets through the foundation, with a total return of KRW 74.52 million (USD 50,000), representing just 0.3% of the total frozen assets. Member Kang noted that current laws do not mandate defunct service providers to transfer user assets to the foundation, lack enforcement mechanisms, and that the foundation has not actively promoted the asset recovery application process. He urged the Financial Supervisory Service to accelerate the second phase of legislation to strengthen user protection measures.
South Korea halts 15 virtual asset firms, freezing 22.1 billion won in user assets, with a recovery rate of 0.3%.
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Summary
Digital Asset News: As of May 4, 2026, 15 suspended virtual asset firms in South Korea have frozen 221 billion won ($14.87 million) in user assets, affecting 1.949 million individuals. Only six companies transferred assets to the Digital Asset Protection Foundation, covering 1.92 million users and 23.6 billion won ($1.59 million). Just 131 users recovered 74.52 million won ($50,000), or 0.3% of the total frozen assets. A member of the National Power Party has called for faster legislation to enhance real-world asset (RWA) disclosures and user protection mechanisms, as the foundation has not actively pursued recovery efforts. Current laws do not require suspended firms to transfer assets to the foundation.
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