South Korea to Implement Bank-Level Liability for Crypto Exchanges Following Upbit Hack
- The Financial Services Commission (FSC) is reviewing provisions for no-fault liability rules on crypto exchanges.
- Following a breach at Upbit, over $30 million in Solana-based tokens were transferred to external wallets within an hour.
- Since January, South Korea’s five major exchanges reported a total of 20 system failures, causing over $3.5 million in losses.
- Lawmakers are considering fines up to 3% of annual revenue for hacking incidents, similar to penalties faced by banks.
- The Upbit incident has raised concerns about delayed reporting, with the exchange notifying regulators nearly six hours post-hack.
The proposed regulations aim to hold crypto exchanges accountable like traditional financial institutions, ensuring customer compensation for losses due to hacks or failures. This comes amid increasing scrutiny on operational standards and security measures within the sector.
With over $30 million lost in the Upbit hack and significant system failures reported across major exchanges, the upcoming changes could reshape the operational landscape for crypto platforms in South Korea.
