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South Korea urges exchanges to boost cold storage after Binance hack
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South Korea’s Financial Services Commission (FSC) has urged domestic cryptocurrency exchanges to increase the proportion of customer assets held in offline cold wallets following a $6.3 billion attack on Binance last week. The regulator’s call came after an emergency meeting on Monday with the Financial Supervisory Service, the Financial Security Institute, the Digital Asset eXchange Alliance (DAXA), and major crypto service providers. The meeting was convened to assess the impact of the Binance hack on South Korea’s crypto market and to review exchanges’ security measures.
During the meeting, the FSC examined exchanges’ IT access controls, wallet withdrawal approval and signing procedures, and administrator privileges. It also pressed providers to raise the share of assets stored in cold wallets, which are not connected to the internet. South Korean law already mandates that exchanges hold at least 80% of users’ crypto assets in cold storage, though actual ratios vary widely among the country’s major platforms.
At the end of September, Upbit reported a cold wallet ratio of 99.17%, according to Financial Supervisory Service data cited by local media. Bithumb followed at 94.76%, Coinone at 85%, Digital X (formerly Korbit) at 82.79%, and GOPAX at 80.54%. The FSC’s push for higher cold storage comes as attackers stole about $6.3 billion from Binance’s internet-connected hot wallets last week, moving most of the funds in roughly 20 minutes, according to blockchain intelligence firm TRM Labs. Binance has said the vast majority of users’ assets are held in cold storage.
The regulator also urged crypto providers to continuously monitor deposits and withdrawals, secure additional incident response personnel, and promptly report and share information about unusual access attempts. Operators were asked to set aside additional reserves and implement other security measures that could be introduced immediately to prevent similar breaches. The FSC said it would continue working with relevant agencies and the industry to prevent further attacks and limit potential damage.
The FSC’s warning coincides with a separate review by the Bank of Korea, which is surveying 18 banks and 13 brokerages about their exposure to crypto-related risks, including major exchange hacks and prolonged market downturns. The central bank’s review began before the Binance attack. Cointelegraph reached out to Upbit, Bithumb, Coinone, Digital X, and GOPAX for comment but had not received a response at the time of publication. The FSC’s actions signal growing regulatory scrutiny of crypto security in South Korea, one of the world’s most active digital asset markets.
