South Korea Calls on Crypto Exchanges to Strengthen Security After Binance Hack

The Financial Services Commission (FSC) of South Korea on November 2, 2026, urged the country's largest cryptocurrency exchanges to increase the share of assets in cold wallets following a hack of Binance, which resulted in the theft of crypto assets worth approximately $6.3 billion. The regulator held an emergency meeting with industry representatives, but no new mandatory storage regulations have been established yet.

The meeting was led by Yoo Young-joon, head of the digital financial policy division at the FSC. Participants included representatives from the Financial Supervisory Service, the Financial Security Institute, the DAXA cryptocurrency exchange association, and major trading platforms such as Upbit, Bithumb, Coinone, Digital X, and Gopax.

The regulator reviewed mechanisms for restricting access to information systems, procedures for approving and confirming withdrawals from hot wallets, as well as administrator rights management. Exchanges were advised to ensure constant monitoring of deposits and withdrawals, increase the number of incident response staff, promptly report suspicious access attempts, and build up financial reserves.

Cold storage share may increase to 99%

According to current South Korean requirements, cryptocurrency operators must store at least 80% of the economic value of user crypto assets in cold wallets that are not connected to the internet. Thus, the remaining 20% is allowed to be placed in hot wallets and other storage systems.

According to data from the Financial Supervisory Service obtained by the office of National Assembly member Min Byung-duk, as of September 30, 2026, the cold storage share at Upbit was 99.17%, at Bithumb – 94.76%, at Coinone – 85%. Digital X had a rate of 82.79%, and Streami, the operator of Gopax, – 80.54%.

Thus, Upbit kept only 0.83% of client crypto assets outside cold wallets, whereas Streami exceeded the established minimum by 0.54 percentage points.

According to News1 on November 3, industry representatives are discussing the possibility of raising the mandatory cold storage share to 99%. However, the FSC has not officially announced the introduction of such a regulation.

Raising the threshold from 80% to 99% would reduce the maximum allowable share of assets outside cold storage from 20% to 1%. However, reducing funds in hot wallets may complicate the prompt processing of withdrawal requests.

Exchanges request changes to withdrawal restriction rules

According to Yonhap, representatives of the cryptocurrency industry have also proposed revising the rules for suspending asset withdrawals when another exchange is hacked. Current legislation prohibits arbitrary restrictions unless there are legally provided grounds. The regulator is considering easing these requirements for emergency situations.

The reason for increased oversight was the hack of Binance on October 29. The exchange reported losses of about $6.3 billion and stated its intention to fully compensate clients for the damage using its own funds and the SAFU user protection fund.

The FSC has not yet set a new mandatory cold storage threshold or announced timelines for potential rule changes.