South Korea urges exchanges to boost cold storage after Binance hack

What happened

South Korea’s Financial Services Commission urged domestic crypto exchanges to hold more assets in cold wallets, which are offline storage, after a $6.3 billion attack on Binance. The FSC met regulators and the DAXA exchange alliance to review security measures.

Confirmed

Global impact / market context

Cold wallets keep crypto offline, so hackers cannot reach them over the internet. Pushing exchanges toward more offline storage may reduce losses from attacks, but moving assets and tightening withdrawal checks could raise operating costs and slow customer withdrawals.

Analyst inference

South Korean law already requires exchanges to keep at least 80% of user crypto in cold storage, which means offline wallets. Reported ratios vary: Upbit at 99.17%, Bithumb at 94.76% and Coinone at 85%, so some exchanges face more changes than others.

Analyst inference

What to watch

1. South Korea’s Financial Services Commission reviewed exchanges’ IT access controls, wallet withdrawal approval and signing procedures, and administrator privileges after the Binance hack, according to its statement Monday. Confirmed
2. The FSC urged crypto service providers to increase the share of assets held in offline cold wallets, a request rather than a new legal requirement. Proposed
3. Watch whether exchanges with lower cold wallet ratios, such as Coinone at 85%, shift more user assets offline, which could affect withdrawal speed and security spending. Analyst inference

Evidence

• cointelegraph.com