Young Crypto Bros Line Up In Bankruptcy Court – The Chosun Ilbo (English Edition): Korea Daily News


Young Korean cryptocurrency investors are lining up in bankruptcy courts after losing huge sums of money when the bubble burst this year.

The Seoul Bankruptcy Court recently agreed to cancel delinquent loans taken by crypto-brothers, which should encourage more of them to throw themselves at the mercy of the court.

According to court data, the number of people seeking personal rehabilitation in the first five months of this year rose by 2,600 year-on-year to 34,553. Most of the applicants are believed to be in their 20s and 30s.

Bankruptcy lawyers are reporting a surge in the number of young Koreans caught up in the bitcoin craze. A 30-something office worker borrowed 25 million won from his credit card to invest in cryptocurrencies and even more from a subprime lender when the first investment blew up (US$1 = 1,300 won) .

“Before, I was a hard-working wage earner, but I have become an awful debt-ridden husband,” he said.

Lee Seo-young from law firm A-Part said, “Even up until the beginning of last year, most people in their twenties who went bankrupt had just defaulted on their credit cards, but recently , about half of them have lost all their money on cryptocurrencies. Their numbers have tripled in the last two years.”

A Seoul Bankruptcy Court official said, “We don’t keep separate statistics because of rehabilitation, but the number of people who lost money on cryptocurrencies has definitely increased.”

Legal experts expect the trend to intensify after the Seoul Bankruptcy Court made it easier to get the green light for the rehabilitation of such defaulters.

In principle, the court authorizes the rehabilitation of debtors whose liabilities exceed assets and counts bank loans and other loans as assets. But under a new guideline that took effect July 1, it excludes losses from investments in stocks or crypto they made with money borrowed from assets.

Suppose a person borrows 10 million won from a bank, invests it in cryptocurrencies and loses 9 million won. Prior to the new measure, the entire 10 million won was included in their assets, but under the new measure only 1 million won is included, meaning their liabilities now exceed their assets.

But it has drawn criticism that the court is being too lenient with reckless gamblers who have borrowed money and thrown it into a bottomless pit, while those who have only spent their own money cannot get away with it. expect such indulgence. Another point of contention is that only the court in Seoul is applying the directive, but not those elsewhere in the country.

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