South Korea’s Financial Services Commission has called on domestic crypto exchanges to hold a larger share of customer assets in offline cold wallets following last week’s $6.3 billion attack on Binance.

The regulator said it convened an emergency meeting with the Financial Supervisory Service, the Financial Security Institute, the Digital Asset eXchange Alliance and major crypto service providers to assess the possible impact on the local market and review current security practices.

Emergency review after a major breach

According to the FSC, the meeting focused on how exchanges manage core security controls after attackers drained roughly $6.3 billion from Binance’s internet-connected hot wallets. Most of those funds were moved in about 20 minutes, underscoring the risks tied to assets kept online.

Binance has said that the vast majority of users’ assets are stored in cold wallets. South Korean authorities did not say that local platforms had been breached, but used the incident to reassess defensive measures across the domestic industry.

Regulator asks for tighter controls

The FSC said it reviewed exchanges’ IT access controls, wallet withdrawal approval and signing procedures, and the scope of administrator privileges. It urged operators to strengthen these areas and to increase the proportion of user assets held offline.

The commission also told providers to continuously monitor deposits and withdrawals, secure additional personnel for incident response and quickly report and share information on unusual access attempts. Operators were further asked to set aside additional reserves and introduce any other security measures that can be implemented immediately to reduce the risk of similar incidents.

Cold storage is already required, but levels differ

South Korean rules already require exchanges to keep at least 80% of customers’ crypto assets in cold storage. Even so, the actual ratios still vary meaningfully among major trading platforms.

Financial Supervisory Service data for the end of September showed Upbit with a cold wallet ratio of 99.17%, followed by Bithumb at 94.76% and Coinone at 85%. Digital X, formerly Korbit, reported 82.79%, while GOPAX stood at 80.54%, only slightly above the minimum requirement.

What comes next

The FSC said it will continue coordinating with relevant agencies and the industry to help prevent further attacks and limit potential damage if incidents occur. For now, the clearest immediate step from the regulator is a push for more assets to be kept offline, alongside faster reporting and stricter operational controls at exchanges.

That approach suggests the authorities are treating the Binance hack as a warning for the wider market, even in a jurisdiction where cold storage mandates are already in place.

Source: cointelegraph.com