South Korea urges exchanges to boost cold storage after Binance hack

South Korea’s Financial Services Commission has urged domestic crypto exchanges to increase the proportion of assets held in cold wallets after the $6.3 billion attack on Binance last week. 

In a statement 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 review exchanges’ security measures. 

The FSC 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.

Attackers stole about $6.3 billion from Binance’s internet-connected hot wallets last week, moving most of the funds in about 20 minutes, according to blockchain intelligence firm TRM Labs. Binance has said the vast majority of users’ assets are held in cold storage.

South Korean law already requires exchanges to hold at least 80% of users’ crypto assets in cold storage, though cold wallet holdings vary considerably among South Korea’s major exchanges.