South Korea's Financial Services Commission (FSC) has asked domestic crypto exchanges to keep a larger share of customer assets in cold wallets and to strengthen their response to suspicious activity following the Binance hack, the regulator said in a Nov. 3 clarification.
The FSC said it immediately requested the measures at an emergency meeting held at 10 a.m. on Nov. 2. Participants included the Financial Supervisory Service, the Financial Security Institute, a crypto industry association, and major virtual-asset businesses. The FSC dates the Binance hack that prompted the review to Oct. 30.
Four requested safeguards
The FSC's requests cover custody, transfers, incident response, and financial buffers. Specifically, the regulator asked domestic exchanges to:
- Increase the proportion of customer assets held in cold wallets;
- Continuously monitor deposits and withdrawals;
- Secure additional response staff and promptly report and share abnormal access attempts;
- Build additional reserves.
The FSC's Nov. 3 clarification reaffirmed that these four safeguards were requested for user protection at the Nov. 2 meeting.
The November releases do not specify a new numerical cold-wallet threshold, an additional reserve amount, or exchange-by-exchange implementation results. Completion of the requests remains unconfirmed.
Existing custody framework
The requests build on a custody framework adopted in 2024. The FSC's July 2024 supervision-regulation notice set the customer-asset cold-wallet share at 80% of defined economic value and described cold storage as keeping assets separated from the internet.
The ratio uses a defined valuation method based on quantities and average won conversion values over the preceding year. The calculation multiplies each type's quantity by its preceding-year average won conversion value, then adds the amounts.
The same July 2024 notice established insurance, mutual-aid coverage, or reserve standards to meet liabilities arising from incidents such as hacking and computer failures. The notice accompanied the legal framework taking effect on July 19, 2024.
The 80% ratio is the 2024 standard, not a newly announced threshold.
Broader system checks
The November meeting also examined controls over access to computer systems, approval and signing arrangements for wallet withdrawals, and administrator privileges. Those checks extend the review beyond the share of assets held offline to the systems and permissions used to move them.
Separately, on Oct. 28, regulators began on-site inspections after Bithumb reported signs of an employee-information leak. The Nov. 2 meeting concerns the subsequent response to Binance and the safeguards sought across domestic operators.
