South Korea’s Financial Services Commission held an emergency meeting on November 2 to strengthen safeguards at domestic crypto exchanges following the Binance hack on October 30. The FSC requested that exchanges increase their share of customer assets held in cold storage, continuously monitor fund transfers, deploy additional response staff, report abnormal access attempts, and build larger reserves against security breaches.
The requests formalize measures already outlined in the FSC’s July 2024 supervision-regulation notice, which set an 80% cold-wallet custody requirement for defined economic value and established insurance, mutual-aid, and reserve standards for incidents including hacking and computer failures. The legal framework for custody standards took effect on July 19, 2024.
The November 2 emergency meeting examined three control areas: computer-system access oversight, approval and signing arrangements for wallet withdrawals, and administrator privileges. Participants included the Financial Supervisory Service, Financial Security Institute, a crypto industry association, and major virtual-asset businesses operating in South Korea.
The FSC’s action follows on-site inspections that began on October 28 after Bithumb, a South Korea-based cryptocurrency exchange, reported an employee-information leak. The Binance hack involved approximately $6 billion in customer funds, according to FSC dating of the October 30 incident.
On November 3, the FSC issued a clarification reaffirming the four safeguard requests from the November 2 meeting. The commission did not specify a new numerical cold-wallet threshold beyond the existing 80% standard, additional reserve amounts required, or implementation timelines for individual exchanges.
