Overview
- The FSC announced on Thursday that it will issue a no-action letter permitting exchanges to temporarily halt deposits and withdrawals when abnormal activity suggests a possible cyberattack.
- Regulators told exchanges to boost 24/7 monitoring, assign staff to investigate suspicious transfers, limit hot-wallet balances and restrict processing to staffed hours if continuous supervision is not available.
- South Korea already requires at least 80% of customer assets in cold storage and the FSC said it is considering raising that minimum, a change that could reduce theft risk but slow large withdrawals and squeeze liquidity.
- The policy shift follows recent incidents including GOPAX’s precautionary suspension after a threatening email and Prabang’s October hot-wallet loss of about 100 million won, which highlighted limits to acting only after a confirmed breach.
- The FSC and the Financial Security Institute will expand inspections, update security standards by the end of 2026 and pursue new cybersecurity rules through a proposed Digital Assets Act, while key details on freeze conditions and duration remain undecided.