South Korea to allow crypto withdrawal freezes over hacking threats

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South Korea’s Financial Services Commission (FSC) plans to let crypto exchanges suspend deposits and withdrawals when they suspect a hacking attempt, without waiting for a breach to be confirmed.

On Thursday, the regulator said it would issue a no-action letter allowing preventive suspensions under certain conditions. Current rules permit restrictions only when a hacking incident is clearly established. The FSC also called for 24-hour security monitoring, higher cold-wallet holdings and stronger insurance coverage and reserves.

The move follows security concerns at local exchanges. GOPAX suspended trading, deposits and standard withdrawals on Friday after receiving a hacking threat, although it reported no breach. On 24 October, Prabang suspended services after detecting abnormal hot-wallet withdrawals, reporting losses of about $70,000.