South Korea pushes crypto exchanges to raise cold wallet holdings

South Korea’s financial regulator has called on cryptocurrency exchanges to increase the proportion of customer assets held in cold wallets after the high‑profile Binance hack. Existing rules already mandate that exchanges keep at least 80% of user funds offline, but officials say the current requirement may be insufficient to protect investors from future breaches.

The Binance incident, which saw attackers steal millions of dollars worth of digital assets, has heightened scrutiny of security practices across the industry. By demanding a higher level of cold storage, the regulator aims to reduce the risk of large‑scale theft and reassure users that their holdings are safeguarded.

Regulatory push for stronger security

Stronger cold‑wallet mandates could influence how Korean exchanges allocate capital and manage liquidity. If more assets are locked in offline storage, exchanges may need to adjust their on‑hand balances, potentially affecting short‑term trading volumes.

Investors watching the Korean market may view the regulatory tightening as a sign of increasing confidence in the sector’s maturity. The move could also set a precedent for other jurisdictions looking to bolster crypto security standards.

Based on reporting from Cointelegraph. Read the original.