South Korea urges exchanges to raise cold storage after $6.3 billion Binance hack

South Korea’s Financial Services Commission has told domestic crypto exchanges to increase the share of assets kept in cold wallets after the $6.3 billion attack on Binance last week. For high-risk operators, the message is straightforward: regulators are looking at both custody design and operational controls, not just headline security claims.

1. In a statement on Monday, the FSC said it held an emergency meeting with the Financial Supervisory Service, the Financial Security Institute, the Digital Asset eXchange Alliance (DAXA) and major crypto service providers to review the impact of the Binance hack on South Korea’s crypto market and examine exchange security measures.
2. The regulator said it reviewed exchanges’ IT access controls, wallet withdrawal approval and signing procedures, and administrator privileges. It also urged providers to increase the proportion of assets held in offline cold wallets.
3. According to blockchain intelligence firm TRM Labs, attackers stole about $6.3 billion from Binance’s internet-connected hot wallets last week, moving most of the funds in about 20 minutes. Binance has said the vast majority of users’ assets are held in cold storage.
4. South Korean law already requires exchanges to keep at least 80% of users’ crypto assets in cold storage, but actual ratios vary sharply. At the end of September, Upbit’s cold wallet ratio stood at 99.17%, followed by Bithumb at 94.76%, Coinone at 85%, Digital X, formerly Korbit, at 82.79%, and GOPAX at 80.54%, according to Financial Supervisory Service data cited by local media.
5. The FSC also told providers to continuously monitor deposits and withdrawals, secure additional incident response personnel, and promptly report and share information about unusual access attempts. Operators were asked to set aside additional reserves and implement other security measures that could be introduced immediately to help prevent similar breaches.

The warning lands as the Bank of Korea separately surveys 18 banks and 13 brokerages about their exposure to crypto-related risks, including major exchange hacks and prolonged market downturns. The central bank’s review began before the Binance attack.