South Korea weighs near-total cold storage mandate for exchanges
Regulation & Gov ·
Regulators are studying a jump in required offline asset storage from 80% to as high as 99% after a security breach at Binance.
South Korea's Financial Services Commission is reviewing a rule change that would push the minimum share of customer funds exchanges must keep in cold wallets up from 80% to around 99%, a response tied directly to the recent Binance hack, according to News1. The review was also detailed in reporting from wublockchain.xyz.
Current practices among domestic platforms already vary widely relative to the proposed threshold. Upbit is said to keep more than 99% of client holdings offline, while Bithumb sits near 94% and Coinone is reported at roughly 85% — figures that illustrate how a mandated 99% floor would leave some platforms needing significant adjustment and others largely unaffected.
The mechanism at stake is straightforward: cold wallets, disconnected from the internet, are far harder for attackers to reach than hot wallets used for active trading and withdrawals, so a higher cold-storage floor is meant to shrink the pool of funds exposed to a repeat of the kind of breach that hit Binance. But moving more assets offline also means more manual steps to move them back when customers want to withdraw, which is why industry participants have flagged concerns that tighter rules could slow withdrawal processing and add operational strain, with smaller exchanges likely to feel the heaviest burden given thinner infrastructure and compliance resources.
A second account within the same cluster of reporting confirms the broad shape of the proposal — stricter cold wallet thresholds under consideration following the Binance incident, with potential knock-on effects for withdrawal speed — though no additional figures beyond those already cited have surfaced.
The Financial Services Commission has not adopted the measure, and no timeline for a decision or implementation has been given. Open questions include whether the final threshold will land at 99% or somewhere lower, whether smaller exchanges would get a grace period or tiered requirements, and how any rule would address the withdrawal-speed tradeoffs that industry participants have raised.