South Korea to Enforce Bank-Level Liability on Crypto Exchanges Following Upbit Hack
- South Korea’s Financial Services Commission (FSC) is reviewing no-fault liability rules for crypto exchanges.
- The regulatory move follows a breach at Upbit, where over $30 million worth of Solana-based tokens were transferred to external wallets.
- From January to November, South Korea’s five major exchanges reported a total of 20 system failures, affecting over 900 users and causing losses exceeding $4 million.
- Lawmakers are considering fines up to 3% of annual revenue for hacking incidents, aligning penalties with those imposed on banks.
- A draft stablecoin bill is also expected by December, with lawmakers urging regulators to expedite the process.
The proposed regulations aim to hold crypto exchanges accountable for customer losses due to hacks or failures, similar to traditional financial institutions. This comes in response to recent security breaches that have raised concerns about the operational integrity of crypto platforms.
With over $30 million lost in the Upbit hack and significant service outages reported across major exchanges, these new rules reflect a push for enhanced accountability in the cryptocurrency sector.
