FSC Convenes Emergency Meeting After Record Binance Breach

South Korea's Financial Services Commission (FSC) has urged local crypto exchanges to keep a greater share of customer assets in cold wallets, following a $6.3 billion attack on Binance's hot wallets last week. In a statement released on Monday, the regulator said it had convened an emergency meeting to review the impact of the hack on the domestic market.

The meeting brought together the Financial Supervisory Service, the Financial Security Institute and the Digital Asset eXchange Alliance (DAXA), with major crypto service providers also taking part.

Cold wallets are offline storage systems that are not connected to the internet, which makes them harder for attackers to reach than internet-connected hot wallets. South Korean law already requires exchanges to hold at least 80% of customer crypto in such offline storage. Because the Binance breach targeted internet-connected wallets specifically, raising offline holdings directly reduces the share of customer funds that attackers could reach online.

Details of the Attack

According to blockchain intelligence firm TRM Labs, attackers stole approximately $6.3 billion from Binance's hot wallets last week. Hot wallets, which remain connected to the internet, are easier targets for intruders. The firm said most of the stolen funds were moved in about 20 minutes, linked the theft to North Korea, and described it as the largest hack in history. North Korea has denied any role, pointing the finger at the United States instead. That compressed timeframe highlights the practical challenge behind one of the FSC's accompanying demands — monitoring deposits and withdrawals continuously rather than through periodic checks.

Binance has said the vast majority of its users' assets are held in cold storage, meaning most customer funds were kept offline when the attack took place.

Regulator Reviews Exchange Security

The FSC said its review covered how exchanges control access to their IT systems, as well as wallet withdrawal approvals, signing procedures and administrator privileges. Following the assessment, the regulator asked providers to raise the proportion of assets held in offline cold wallets and to monitor deposits and withdrawals on a continuous basis.

Exchanges were also told to add more staff for incident response, promptly report and share information about unusual access attempts, and set aside extra reserves. In addition, the FSC asked operators to put in place any other security measures that could be introduced immediately to prevent similar breaches.

The agency said it would keep working with other authorities and the industry, with the goal of preventing further attacks and limiting potential damage.

Cold Wallet Ratios Vary Widely Across Exchanges

Although every exchange must comply with the 80% requirement, actual cold wallet holdings differ considerably. Data from the Financial Supervisory Service, cited by local media, shows the ratios as of the end of September.

Upbit recorded the highest ratio at 99.17%. Bithumb followed at 94.76%, while Coinone reported 85%. Digital X, formerly known as Korbit, stood at 82.79%, and GOPAX registered 80.54%, just above the legal minimum — the narrowest cushion among the five platforms, while Upbit operates with the widest. Cointelegraph reached out to all five exchanges for comment.

Bank of Korea Runs a Separate Review

The FSC's warning comes as the Bank of Korea conducts its own review. The central bank is surveying 18 banks and 13 brokerages — 31 financial firms in total — about their exposure to crypto-related risks, covering scenarios such as major exchange hacks and prolonged market downturns. The Bank of Korea's review began before the Binance attack took place. Run in parallel, the two efforts extend oversight across both the country's crypto exchanges and conventional financial institutions with potential crypto exposure.

This article was first published by Blockonomi.