South Korea’s FSC Convenes Emergency Meeting With Crypto Exchanges After Binance Hack, Eyes Higher Cold-Wallet Holdings

South Korea’s financial authorities have launched an emergency security review of domestic crypto exchanges after a major hack at Binance, the world’s largest digital-asset exchange.The Financial Services Commission will hold an emergency meeting at 10 a.m. on November 2 with officials from won-market exchanges including Upbit, Bithumb and Coinone, as well as representatives of non-won-market platforms. The session is meant to check the state of security management at local virtual-asset exchanges following the recent Binance hack.At the meeting, officials will share details of the Binance breach, including the scale of losses and the circumstances of the incident, and review domestic exchanges’ security systems and user asset-protection frameworks. A central agenda item will be whether to raise the proportion of crypto assets held in cold wallets, which are kept separate from the internet, to minimize hacking damage.Cold wallets store digital assets offline and can reduce the risk of online attacks. Under South Korea’s Virtual Asset User Protection Act, exchanges must keep at least 80% of customer crypto assets in cold wallets.Actual custody ratios vary by exchange. Upbit holds more than 99% of user crypto assets in cold wallets, while Bithumb keeps that figure in the 94% range and Coinone at about 85%. Gopax, operated by DigitalX and Streami, is in the low-80% range, slightly above the legal minimum.The emergency review follows the theft of about $6.3 billion in crypto assets from Binance on October 29. In South Korea, recent security incidents have also underscored the need for stronger user protection, including a leak of personal information involving Bithumb employees and customers and roughly $72,000 in crypto asset losses at Prabang.Financial authorities plan to broaden the security review beyond crypto exchanges to the wider financial sector. The FSC will hold a separate meeting on November 5 with the Financial Supervisory Service, the Korea Financial Security Institute, relevant government ministries, financial industry associations and the heads of the country’s five major commercial banks to examine the sector’s security response framework.