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After Historic Binance Hack, South Korea Considers 99% Cold Wallet Rule for Crypto Exchanges
While a tougher cold storage rule could protect customer assets from hackers, smaller exchanges may struggle to process withdrawals quickly.
Dextape brief
South Korean regulators are weighing a higher minimum for the share of customer funds exchanges keep offline, according to News1. The Financial Services Commission met urgently with large platforms and custodians after the Binance breach, which the article ranks as the worst assault in the sector's history. Existing rules mandate that platforms keep 80 percent of user holdings in cold storage, and discussions center on moving that floor close to 99 percent, a level some large platforms already maintain. The article warns smaller exchanges could struggle, and slower access to offline funds could delay withdrawals, as at Bithumb, where about 13-hour delays hit some altcoins in August. The FBI has attributed the more than $6.3 billion theft to the North Korea-linked group TraderTraitor, which Pyongyang denies.
Why it matters: It shows how exchange hot-wallet limits and withdrawal speed are tied to security rules, which affects how quickly customers can access their funds.
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Dextape context
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Terms in this story
- Cold storage
- Keeping the keys that authorize transfers on a device or medium that stays offline, away from everyday internet use.