South Korea's Financial Services Commission issued a no-action letter allowing crypto exchanges to freeze deposits and withdrawals when a hack is suspected, rather than only when one is confirmed. The FSC cited the October breach of Binance, which lost about $6.3 billion to attackers the FBI tied to North Korea, as justification for faster protective action.
The move follows domestic incidents. Bithumb disclosed a personal data leak from an internal mobile system in late October. GOPAX halted trading and withdrawals on November 6 after a hacking threat.
The FSC also wants all 28 registered crypto businesses to join the Financial Security Institute, the sector's state-run cyber auditor, for vulnerability checks. Only five won-trading exchanges currently belong to the FSI. The push includes guidelines requiring exchanges to keep minimal balances in hot wallets and to raise insurance and reserves. Operators already hold over 95% of client assets offline, against an 80% legal floor.
The timing creates complications. The FSI confirmed Monday that hackers breached the online portal financial firms use to submit security-audit paperwork. Stolen files may include those firms' own answers to FSI security assessments. The FSI said the portal sits outside its core network and regulators are checking what was taken.
Lasting rules depend on the proposed Digital Asset Act, which would impose bank-grade IT duties and damage liability on exchanges. Until it passes, Seoul is regulating by guideline.