South Korea Proposes Fines for Hacked Crypto Exchanges

South Korea’s Financial Services Commission proposes a bill imposing fines up to 10% of stolen assets on hacked cryptocurrency exchanges, following a $36 million attack on Upbit in November.

This proposed legislation highlights increasing regulatory scrutiny on digital asset platforms, aiming to align security measures with traditional financial institutions to bolster user protection and financial stability.

FSC Imposes 10% Fines on Hacked Exchanges

South Korea’s Financial Services Commission has proposed fines on hacked cryptocurrency exchanges amounting to 10% of stolen assets, following a $36 million hack on Upbit. Such fines aim to impose stricter IT security standards akin to those of traditional financial institutions.

If implemented, the regulation could impose fines of up to $3.6 million on exchanges, underscoring a shift toward more stringent security protocols. The measure reflects an effort to ensure robust user protection in the crypto space. According to the Financial Services Commission (FSC), “Tougher enforcement, higher security expectations, and stronger user protection are at the heart of our ongoing regulatory revisions.”

The financial sector and crypto exchanges are monitoring these potential regulations. Industry participants argue that stringent domestic requirements may disadvantage local exchanges against international competitors not subject to similar fines.

Bank-Level Security Standards Sought for Crypto

Did you know? South Korea’s move to apply bank-level security standards to crypto exchanges mirrors similar global trends aimed at fortifying digital asset markets against rising cybersecurity threats.

According to CoinMarketCap, Bitcoin (BTC) traded at $90,949.96, marking a 0.36% rise in 24-hour trading performance. The market cap reached 1.82 trillion, with a dominance of 58.35%. The trading volume showed a 6.75% increase over 24 hours.

Insights from the Coincu team suggest that South Korea’s proposed regulations could lead to increased operational costs for exchanges, influencing their competitive standing in the global market. These changes may also accelerate the consolidation of exchanges, reducing market diversity.