Crypto & Finance · VIDEO
South Korea: FSC pushes for cold storage after $6.3 billion hack at Binance
The South Korean Financial Services Commission has called an emergency meeting with major players in the crypto sector to assess the impact of the Binance hack and strengthen security measures, including increasing assets in cold storage.
KEY TAKEAWAYS
- The South Korean FSC has requested exchanges to increase the percentage of assets in cold storage following the $6.3 billion hack at Binance
- Currently, South Korean law requires exchanges to maintain at least 80% of assets in cold storage
- Data shows significant variations among major exchanges: Upbit at 99.17%, Bithumb at 94.76%, Coinone at 85%
- The FSC has also recommended continuous monitoring of deposits and withdrawals and an increase in personnel for incident response
Transcript
South Korea has bolstered security measures for cryptocurrency exchanges following a $6.3 billion attack on Binance. The Financial Services Commission (FSC) held an emergency meeting with key financial authorities and crypto operators to assess the impact and strengthen security protocols.
The FSC has urged exchanges to increase the use of offline cold wallets, continuously monitor transactions, strengthen access controls, and maintain dedicated incident response teams. South Korea already mandates that at least 80% of clients' crypto assets be held in cold storage, but the recent attack has prompted further enhancements.
Data reveals significant variations in cold storage practices among major South Korean exchanges. Upbit leads with a 99.17% cold storage ratio, followed by Bithumb at 94.76%, and Coinone at 85%. Digital X and GOPAX have ratios of 82.79% and 80.54%, respectively.
The FSC has called for immediate implementation of additional security measures, including continuous monitoring of deposits and withdrawals, strengthening access protocols, and establishing dedicated incident response personnel. Operators are also encouraged to maintain additional reserves and share information on unusual access attempts.
Meanwhile, the Bank of Korea is investigating 18 banks and 13 intermediaries regarding their exposure to cryptocurrency-related risks. The investigation examines the impact of large hacks on exchanges and prolonged market declines.
The attack on Binance has caused a 7.2% drop in daily trading volume on local exchanges, highlighting market sensitivity to security events. Exchanges are accelerating the adoption of advanced risk management solutions, including Data Loss Prevention (DLP) systems.
Users of South Korean exchanges can expect longer withdrawal times due to new security protocols, but these measures offer enhanced protection against fraud and unauthorized access. Analysts predict continued growth in the South Korean cryptocurrency market, with trading volume potentially increasing by 15% by the end of the year.
The FSC's measures have created new opportunities for cybersecurity service providers, particularly those specializing in Managed Detection and Response (MDR) and SOC as a Service solutions. Exchanges must also navigate an increasingly complex regulatory landscape, ensuring compliance with European NIS2 and DORA regulations.
