South Korea's Financial Services Commission called the country's crypto exchanges to an emergency meeting on Monday and asked them to move more customer assets into cold wallets, after Binance reported that about $6.3 billion in crypto had been withdrawn without authorization from its hot wallets.

The request lands on one of Asia's busiest retail crypto markets at a weak moment. Upbit operator Dunamu and rival Bithumb were already contending with falling volumes and lower private-market valuations, and stricter security rules mean higher costs for operators that live on trading fees. For investors holding Dunamu ahead of its planned share swap with Naver Financial, the meeting is a reminder that regulators are still writing the rules for how exchanges must protect customer money.

What the FSC asked Upbit, Bithumb and others to do

The meeting, chaired by the commission's director general for digital finance policy, brought in the Financial Supervisory Service, the Korea Financial Security Institute, the industry body DAXA and the main exchange operators, the FSC said in a statement on Nov. 2.

Officials reviewed access controls on exchange computer systems, the approval and signing process for withdrawals from hot wallets and the handling of administrator privileges. They also checked each firm's cold-wallet share and the status of its insurance and reserves.

The commission then asked operators to take four steps that can be put in place right away: raise the share of assets held in cold wallets, monitor deposits and withdrawals around the clock with extra staff, report and share any abnormal access attempts quickly, and set aside additional reserves. It said it would keep working with other agencies and the industry to stop further breaches and limit damage.

The FSC's account of the Binance incident is specific. It said Binance announced on Oct. 30, Korean time, that roughly $6.3 billion (about 8 trillion won) had left its hot wallet without authorization, and that the exchange has pledged to cover user losses with company funds while it traces and freezes the stolen assets. Possible causes raised so far include a compromised employee work laptop that may have opened a path into internal systems, and unauthorized access to transaction approval and signing systems, the regulator said. Capital Times covered the market fallout in its report on bitcoin's October loss.

How much Korean exchanges already keep offline

Korean law already sets a high floor. The Virtual Asset User Protection Act requires exchanges to keep at least 80% of customer crypto in cold wallets, which are disconnected from the internet, according to Bloomingbit, a Seoul-based crypto news outlet.

The big operators sit well above that line. Upbit holds more than 99% of customer assets in cold storage, Bithumb about 94% and Coinone about 85%, while Gopax is in the low 80% range, Bloomingbit reported. A higher legal minimum would bite hardest on the smaller exchanges.

Bloomingbit also reported that the FSC plans a wider session on Nov. 5 with the Financial Supervisory Service, the Korea Financial Security Institute, government ministries, industry associations and the heads of the five largest commercial banks, extending the security review beyond crypto.

Upbit's own hack still shapes policy

Seoul has been tightening the screws since Upbit lost about 44.5 billion won (about $30 million) in Solana-based tokens in a hack on Nov. 27, 2025. The coins were drained in about 54 minutes, and Upbit did not report the breach to the Financial Supervisory Service until more than six hours after it was detected, The Korea Times reported at the time.

Dunamu covered 38.6 billion won of affected customer assets from its own reserves, The Block reported in July, when the supervisor sent the company an inspection report that opened a formal sanctions process. Because the current user protection law has no direct penalties for hacks or IT failures, authorities plan to add them through the Digital Asset Basic Act, The Block said.

The FSC has also been reviewing rules that would require exchanges to compensate users for hacking losses regardless of fault, the standard applied to banks and payment firms, according to The Korea Times. Lawmakers have discussed fines of up to 3% of annual revenue for hacks, against a current cap of 5 billion won for crypto exchanges.

Pressure on the operators is also showing up in their valuations. Dunamu shares changed hands at 241,000 won on Naver Pay's unlisted stock platform on Oct. 20, down from 370,000 won when the Naver Financial share swap was announced last November, The Korea Times reported. Bithumb traded around 140,000 won, from about 350,000 won last November. Upbit's trading volume fell 13% from the previous quarter and Bithumb's 18%, the newspaper said, citing data from The Block.

The next marker is the Nov. 5 meeting with bank chiefs and supervisors. The FSC has not said whether it will raise the 80% cold-wallet floor itself, and as of July the Dunamu and Naver Financial merger had been pushed back to Dec. 31, according to The Block.