South Korea's crypto market is undergoing a significant transformation, with major exchanges and regulators responding to recent security breaches with unprecedented measures. The industry is bracing for a new era of heightened security protocols and comprehensive regulatory frameworks designed to protect consumers and stabilize the digital asset landscape.
Upbit's Unprecedented Security Stance
Following a multi-million dollar Solana-related breach, Upbit, South Korea's largest exchange, has dramatically elevated its security posture. The exchange is moving nearly all customer assets into cold storage, raising its cold-storage ratio to an exceptional 99%. This move, one of the most aggressive in crypto security history, significantly cuts hot-wallet exposure to under 1%. It places Upbit far above Korea’s legal requirement of 80% and ahead of most global major exchanges.
The Push for Bank-Level Accountability and Broader Regulation
In parallel with Upbit's security enhancements, South Korean regulators are actively developing stricter liability rules for crypto exchanges. This proposed framework would mandate platforms to compensate users for losses stemming from hacks or system failures, even if the exchange is not directly at fault. This mirrors the robust consumer protection standards seen in traditional banking. Concurrently, lawmakers are pressing to finalize the country's stablecoin framework, aiming for a draft bill by mid-December. This signals a broad and urgent governmental effort to establish a stable and secure regulatory environment for digital assets.
