South Korea’s Financial Services Commission has urged domestic crypto exchanges to increase the proportion of assets held in cold wallets after the $6.3 billion attack on Binance.
The FSC said it held an emergency meeting with other regulators, cybersecurity agencies and crypto service providers to review security measures
It reviewed exchanges’ IT access controls, wallet withdrawal approval and signing procedures, and administrator privileges. It also urged providers to increase the proportion of assets held in offline cold wallets. But South Korean law already requires exchanges to hold at least 80% of users’ crypto assets in cold storage, with Upbit keeping 99.17% assets in cold wallets, followed by Bithumb at 94.76% and Coinone at 85%.
The Bank of Korea is surveying 31 financial institutions on how a major exchange shutdown, prolonged crypto downturn or losses at another firm could affect their operations. One scenario asks how financial firms would be affected if South Korea’s largest crypto exchange by market share temporarily suspended operations following a major hack or similar incident. Other questions address a steep fall in cryptocurrency prices followed by a sustained trading slump, and the potential fallout if another financial institution suffered heavy losses from a crypto-related incident.