South Korea's Financial Services Commission reviewed domestic virtual asset providers' safeguards after Binance reported approximately USD 6.3 billion in unauthorized hot wallet withdrawals. Providers were urged to increase cold wallet holdings and reserves, continuously monitor deposits and withdrawals, and promptly share information on unusual access attempts. Checks also covered access controls, withdrawal approval and signing systems, and insurance coverage.
Policy & regulationGuidance & interpretationCyber resilienceBlockchain and distributed ledger technologyOperational risk and resilience
South Korea's Financial Services Commission (FSC) held an emergency review of domestic virtual asset providers' security and financial protection arrangements, urging immediate precautions following the Binance hack. Binance reported approximately USD 6.3 billion in unauthorized withdrawals from a hot wallet on Oct. 30. The review follows the FSC's investigation into a suspected employee information leak at Bithumb and its previously stated plans to bring virtual asset firms' security safeguards to a level comparable with those at major financial institutions.
Checks focused on system access controls, wallet withdrawal approval and signing systems, and administrator privileges. Possible attack routes in the Binance incident included a compromised employee work laptop and unauthorized access to transaction approval and signing systems, although these were not presented as confirmed causes. The review also covered cold wallet holdings, insurance coverage and reserves. Providers were urged to increase the proportion of assets held in cold wallets and set aside additional reserves. Operational measures included continuous monitoring of deposits and withdrawals, additional response staff, and prompt reporting and sharing of unusual access attempts.
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