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Archive photo · 26 March 2024South Korea Financial Services Commission Plans No-Action Letter To Freeze Crypto Withdrawals
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FSC to issue no-action letter allowing exchanges to suspend deposits and withdrawals on suspected hacking. Exchanges urged to strengthen security with 24/7 monitoring and more assets in cold wallets.
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6 outlets in this story. Read their headlines below.
Freeze on Suspicion
South Korea’s Financial Services Commission plans to issue a no-action letter that would let crypto exchanges suspend customer deposits and withdrawals when hacking is suspected, rather than waiting for a breach to be confirmed. The FSC said it would permit preventive suspensions under certain conditions, while the current framework allows exchanges to block withdrawals only when a hacking incident has been clearly established. The FSC also called for round-the-clock security monitoring and incident response, and it said exchanges unable to monitor continuously would process deposits and withdrawals only during staffed operating hours and notify users in advance.
The proposal follows GOPAX’s Friday halt after receiving a hacking-related threat, and it follows Prabang’s October suspension after detecting abnormal hot-wallet withdrawals that cost about $70,000. An October review found security weaknesses at 130 of 555 financial entities examined nationwide, and the FSC separately named GOPAX operator Streami and Prabang among 16 organizations tied to earlier security incidents.
Conditions, Monitoring, Cold Storage
The FSC said exchanges would be pushed to adopt 24/7 monitoring, hold more assets in cold wallets, and raise insurance and reserves as part of the preventive-freeze framework. The FSC also said platforms unable to monitor continuously would have to limit transactions to business hours with advance notice to users, and it required tighter risk-management standards. Crypto Briefing described the regulator’s shift as moving the trigger point from “confirmed breach” to “suspected breach,” while it said the specific conditions attached to the relief were not detailed in the announcement.
Crypto Briefing also said the FSC held an emergency meeting on November 2 as the wave of attacks escalated, and it said exchanges currently must keep at least 80% of assets in cold wallets. KuCoin said the regulator was considering raising the minimum requirement for cold storage assets from 80%, while it also said specific conditions had not yet been detailed.
Incidents and What’s at Risk
GOPAX halted trading, deposits, and standard withdrawals on Friday after receiving a hacking-related threat, and a representative said no breach had been confirmed.
Prabang suspended services on Oct. 24 after detecting abnormal withdrawals from its hot wallet and reported losses of roughly $70,000, and the Financial Services Commission later identified cybersecurity deficiencies at 130 of 555 financial companies reviewed nationwide.
Crypto Briefing said Prabang pledged to compensate affected customers using company funds, and it said the research findings described more than 37 financial firms in South Korea hit by cyber incidents between late September and early November 2026.
Crypto Briefing also said around 473,000 records were exposed, and it said roughly 1 billion won was stolen from hot wallets and other targets.
The FSC’s preventive-freeze approach, as described by BigGo Finance, would shorten the window in which funds can drain from a compromised hot wallet, while it would also require platforms to notify users in advance only in the case of restricted operating hours.
