South Korea weighs raising crypto exchange cold wallet minimum to 99% after Binance hack
South Korea's Financial Services Commission is discussing raising the mandatory cold wallet storage threshold for cryptocurrency exchanges from 80% to around 99%, following an emergency meeting prompted by Binance's $6.3 billion hot wallet exploit.
South Korea's Financial Services Commission convened an emergency security inspection meeting on Nov. 2 with domestic cryptocurrency exchanges and custody firms, urging operators to increase offline cold storage holdings and bolster emergency reserves following Binance's $6.3 billion hot wallet exploit.[4][1][2]
Following the session, local news outlet News1 reported that authorities and industry representatives discussed a plan to lift the minimum cold wallet requirement from 80% to roughly 99%. Under the Virtual Asset User Protection Act, exchanges are required to store at least 80% of user crypto offline. However, the FSC's official post-meeting release set no new mandatory ratio, leaving the 99% figure under discussion rather than formally enacted.[4][3][5]
Led by Yoo Young-jun, the FSC's director general for digital financial policy, the meeting included officials from the Financial Supervisory Service, the Financial Security Institute, industry association DAXA, and major exchanges including Upbit, Bithumb, Coinone, Digital X, and Gopax. Regulators reviewed hot-wallet authorization procedures, IT access limitations, and administrator privileges, directing platforms to report abnormal access attempts, expand incident-response staff, and continuously monitor withdrawals.[4]
Regulatory records from late September show significant disparity among exchange reserves. According to FSS figures, Upbit held 99.17% of user assets offline and Bithumb stood at 94.76%, while Coinone held 85%, Digital X held 82.79%, and Gopax operator Streami sat near the floor at 80.54%. Industry participants cautioned that imposing a uniform 99% standard could create liquidity constraints, slow down withdrawal processing, and place disproportionate operational burdens on smaller exchanges.[4][5]
Key facts
- South Korea's Financial Services Commission held an emergency meeting on Nov. 2 with major domestic crypto exchanges after Binance lost roughly $6.3 billion to hot-wallet hackers.
- News1 reported that a plan to raise the statutory cold wallet storage ratio from 80% to about 99% was discussed, though the FSC has not officially adopted or confirmed the figure.
- The Virtual Asset User Protection Act currently obligates South Korean crypto exchanges to store at least 80% of customer assets in offline cold wallets.
- As of Sept. 30, Upbit held 99.17% of customer funds in cold storage and Bithumb held 94.76%, while Coinone held 85%, Digital X held 82.79%, and Gopax held 80.54%.
- The FSC instructed exchanges to strengthen reserves, monitor transaction flows continuously, expand incident-response staffing, and promptly report suspicious access attempts.
- Binance stated on Oct. 30 that it would cover its $6.3 billion loss using its SAFU fund and corporate capital, after the FBI linked the attack to North Korea's TraderTraitor.
Sources · 5 sources
- CO
Cointelegraph@CointelegraphPost on X ·
🇰🇷 NEW: South Korea orders crypto exchanges to increase cold wallet holdings and bolster reserves following Binance’s $6.3B hack, per Reuters. https://t.co/1K9JMEPYgg
Open source - CN
crypto.news@cryptodotnewsPost on X ·
JUST IN: South Korea orders crypto exchanges to boost reserves after Binance’s exploit The Financial Services Commission has urged exchanges to strengthen wallet security, increase cold-wallet holdings beyond the required 80% minimum, improve withdrawal monitoring and set aside additional reserves.
Open source - WI
Whale Insider@WhaleInsiderPost on X ·
JUST IN: 🇰🇷 South Korea’s Financial Services Commission considering raising crypto exchanges’ minimum cold wallet storage requirement from 80% to around 99% after Binance hack - News1. https://t.co/ANAUPRujpB
Open source - UN
UnchainedArticle ·
Binance’s $6.3 Billion Hack Has South Korea Asking Exchanges to Hold More Crypto Offline At an emergency meeting on Nov. 2, South Korea’s Financial Services Commission asked major crypto exchanges to move more customer assets into cold wallets , the regulator said , after Binance lost roughly $6.3 billion from its hot wallets. Alongside more offline storage, the FSC asked operators to keep constant watch on deposits and withdrawals, add incident-response staff, move quickly to report and pass along abnormal access attempts, and build up extra reserves. The release named no Korean exchange and set no new ratio. According to the FSC’s Korean-language statement, Yoo Young-jun , its director general for digital financial policy, led the session, which brought in major crypto operators, the exchange group DAXA, the Financial Security Institute and the Financial Supervisory Service. Officials reviewed how exchanges restrict access to their IT systems, how hot-wallet withdrawals get approved and signed, and how administrator privileges are handled. They also checked each firm’s insurance and reserves. Staff from Upbit , Bithumb , Coinone, Digital X and Gopax attended, The Herald Business reported . Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . How Far Exchanges Sit Above the Floor Operators must hold at least 80% of the economic value of user crypto offline under the FSC’s supervisory regulation for the Virtual Asset User Protection Act, as the FSC sets out in its guidance . Financial Supervisory Service figures that Rep. Min Byung-deok’s office obtained, published by Block Media on Oct. 26 , put Upbit’s offline share at 99.17% as of Sept. 30. Bithumb had 94.76%, Coinone 85%, Digital X 82.79% and Streami, which runs Gopax, 80.54%. By Unchained’s calculation, the 80% floor lets an exchange keep up to 20% of user crypto online, about 24 times the 0.83% Upbit held outside cold storage. Streami sat 0.54 percentage points above the floor. At a 99% level its online share would shrink by about 95%, the same squeeze News1 illustrated for a hypothetical exchange at the floor. The 99% Figure Lifting the share to the 99% some large exchanges already keep has come up, News1 reported on Nov. 3 , attributing that to people in the industry. No FSC official was quoted, and the FSC release does not mention the figure. In February, News1 reported that the FSC was reviewing a ratio of about 100% in the rules for the second phase of crypto legislation. Industry participants also asked the FSC to ease limits on halting withdrawals when a different exchange is hacked, Yonhap reported , citing the industry. The current law bans arbitrary blocks unless a reason set by presidential decree applies, and the FSC plans to review easing the rules so exchanges can restrict withdrawals quickly in such emergencies, according to Yonhap. Previously Binance put its losses at about $6.3 billion on Oct. 30 and said it would cover them from its SAFU fund and company funds. The FBI attributed the theft to North Korea’s TraderTraitor, and Binance has since laid out a four-month path from a tainted software install to the drain. In Korea, the Bank of Korea asked 31 financial firms how a hack-driven outage at the exchange with the No. 1 domestic market share would affect them, and Bithumb said an intruder took personal data from an internal employee app. Related Listen: How Did Hackers Take $388M From Bitget Without a User Withdrawal? The post Binance’s $6.3 Billion Hack Has South Korea Asking Exchanges to Hold More Crypto Offline appeared first on Unchained .
Open source - WB
Wu Blockchain@WuBlockchainPost on X ·
South Korea Considers Raising Crypto Exchanges' Cold Wallet Requirement to 99% Following Binance Hack According to News1, South Korea’s Financial Services Commission is considering raising the minimum cold wallet storage requirement for crypto exchanges from 80% to around 99% following the recent Binance hack. Upbit reportedly holds over 99% of customer assets in cold wallets, compared with roughly 94% at Bithumb and 85% at Coinone. Industry participants warn that stricter requirements could delay withdrawals and increase operational burdens, particularly for smaller exchanges. The proposal remains under discussion and has not been adopted.
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