South Korea urges exchanges to boost cold storage after Binance hack

South Korean regulators are urging cryptocurrency exchanges to enhance their security measures following the recent $6.3 billion hack of Binance, according to a statement released on Monday. The Financial Services Commission (FSC) convened an emergency meeting with key industry players and oversight bodies to assess the impact of the attack on the local crypto market and evaluate existing security protocols.

The FSC highlighted the need for exchanges to increase the percentage of assets stored in offline cold wallets, which are less susceptible to hacking attempts, and to review IT access controls, withdrawal procedures, and administrator privileges. Currently, South Korean law mandates that exchanges maintain at least 80% of user assets in cold storage, although this varies among different platforms.

Recent data from the Financial Supervisory Service shows that Upbit, Bithumb, and Coinone have notably high cold wallet ratios of 99.17%, 94.76%, and 85%, respectively. The regulator also recommended exchanges to bolster their incident response capabilities, promptly report unusual access attempts, and set aside additional reserves.

This advisory follows a separate review conducted by the Bank of Korea, which is assessing the vulnerability of 18 banks and 13 brokerages to crypto-related risks, including significant exchange hacks and prolonged market downturns.