SK Proposes 99% Cold Wallet Rule After Binance Hack

South Korea is considering one of its strictest cryptocurrency security measures yet. The country's Financial Services Commission (FSC) is reportedly reviewing a proposal that would require local crypto exchanges to store approximately 99% of customer assets in cold wallets, up from the current 80% requirement.

The discussion follows the reported $6.3 billion Binance cyber attack in October 2026, which has renewed concerns about how cryptocurrency exchanges protect customer funds against large-scale hacking incidents.

The proposal could significantly change how exchanges such as Upbit, Bithumb, Coinone, and Gopax manage their digital asset reserves. However, the measure remains under discussion and has not been formally adopted.

Why is South Korea changing crypto cold wallet rules, and what could a 99% requirement mean for the country's cryptocurrency industry?

Key Takeaways

• South Korea's FSC is considering increasing the minimum cold wallet requirement from 80% to approximately 99%.

• Reported cold storage levels vary across major exchanges, with Upbit above 99%, Bithumb around 94%, and Coinone approximately 85%.

• The proposal could improve asset protection but may also increase withdrawal delays and operational costs, especially for smaller exchanges.

South Korea Considers a 99% Crypto Cold Wallet Requirement

According to a report by News1, the Financial Services Commission is considering raising the minimum percentage of customer assets that cryptocurrency exchanges must keep in cold wallets.

Under the existing requirement described in the report, exchanges must store at least 80% of customer assets in cold storage. The proposed change would increase that threshold to around 99%.

The move reflects growing regulatory attention toward exchange security following the Binance incident. By keeping a larger share of customer funds offline, regulators aim to reduce the amount of assets directly exposed to online attacks.

However, it is important to distinguish a regulatory proposal from an implemented policy. The FSC has not yet adopted the reported 99% requirement, and the final threshold or implementation schedule remains uncertain.

How Much Crypto Do Exchanges Keep in Cold Wallets?

The reported figures show that South Korean exchanges already maintain different cold storage percentages.

These figures provide context for the proposed rule.

Upbit Cold Storage Percentage

Upbit reportedly keeps more than 99% of customer assets in cold wallets. This means its reported storage ratio is already above the level being considered by regulators.

Bithumb Hot Wallet Exposure

Bithumb reportedly stores approximately 94% of customer assets in cold storage. The remaining share represents assets held outside cold storage, including funds needed for operational liquidity.

If the proposed requirement is adopted at 99%, Bithumb could need to adjust its asset allocation.

Coinone Asset Safety

Coinone reportedly maintains around 85% of customer assets in cold wallets. Compared with the proposed threshold, this would represent a larger adjustment than the reported figures for Upbit and Bithumb.

These percentages should be understood as reported figures rather than a complete assessment of each exchange's security. Cold storage ratios alone do not reveal every aspect of wallet management, access controls, or internal security procedures.

What Happened to Binance in October 2026?

The proposed South Korean regulatory change follows the reported Binance cyber attack in October 2026, which involved approximately $6.3 billion in stolen cryptocurrency.

The incident has been associated with the TraderTraitor hacker group, which has been linked in previous cyber investigations to North Korean state-sponsored activity. The attack has renewed concerns about the security of cryptocurrency infrastructure and the potential consequences of compromised digital asset systems.

For regulators, the incident highlights the importance of limiting the amount of customer funds exposed to internet-connected wallets.

The Binance cyber attack 2026 has therefore become part of a wider discussion about exchange security, custody arrangements, and the responsibilities of crypto trading platforms.

However, increasing cold storage requirements is a preventive measure. It should not be interpreted as proof that cold wallets alone can eliminate exchange hacking risks.

Why Is South Korea Changing Crypto Cold Wallet Rules?

There are several reasons why a higher cold storage threshold may appeal to regulators.

First, offline wallets are generally less exposed to remote attacks because their private keys are not continuously connected to internet-facing systems.

Second, a higher cold storage percentage could limit the amount of customer assets immediately accessible through compromised online infrastructure.

Third, stricter custody requirements could encourage exchanges to strengthen internal asset management and security procedures.

The proposal also fits into broader South Korea crypto regulatory updates 2026, as authorities continue examining how cryptocurrency exchanges should protect customer assets.

Nevertheless, industry participants have raised concerns about operational consequences. Exchanges need some assets in hot wallets to process deposits and withdrawals efficiently. Moving nearly all customer funds into cold storage could make liquidity management more complicated.

Smaller exchanges may face a greater burden because they have fewer resources to maintain sophisticated custody infrastructure.

How Secure Are Crypto Cold Wallets?

Cold wallets are widely used to protect cryptocurrency by keeping private keys offline. This reduces exposure to certain online threats, including remote attacks targeting internet-connected systems.

However, cold storage is not completely risk-free.

Security can still depend on private key management, physical access controls, transaction approval procedures, backup arrangements, and employee access privileges.

A poorly managed cold wallet can still be compromised through insider threats, physical security failures, or mistakes in key management.

This is why a 99% requirement should be viewed as one part of a broader exchange security framework rather than a complete solution.

What Could the New Rule Mean for Gopax and Other Exchanges?

The potential impact extends beyond the three exchanges with reported storage figures.

Gopax and other South Korean trading platforms could also face adjustments if the FSC adopts a higher minimum requirement.

For smaller exchanges, the challenge may involve infrastructure investment, custody arrangements, withdrawal processing, and compliance costs.

A stricter rule could strengthen customer asset protection, but regulators will also need to consider how exchanges maintain sufficient liquidity for normal operations.

The final impact will depend on the adopted threshold, possible exemptions, compliance deadlines, and the technical requirements established by the authorities.

Conclusion

South Korea's consideration of a 99% crypto cold wallet requirement signals growing concern about the security of customer assets following the reported $6.3 billion Binance cyber attack.

The proposal could push local exchanges toward higher offline asset reserves, with Upbit already reportedly exceeding the proposed threshold. Bithumb and Coinone may face greater adjustments if the requirement becomes mandatory.

However, stronger cold storage requirements also bring operational challenges, particularly for smaller exchanges that need to maintain efficient withdrawals and liquidity.

For now, the 99% rule remains under consideration. Its final form will determine how significantly South Korea's crypto exchange security standards change in the coming months.

For users exploring cryptocurrency markets beyond South Korea, choosing a platform with clear custody and security information remains important. You can register on Bitrue to explore its available cryptocurrency trading services and digital asset markets.

FAQ

What is South Korea's proposed crypto cold wallet rule?

It is a proposal to increase the minimum cold storage requirement for crypto exchanges from 80% to approximately 99%.

Has South Korea approved the 99% cold wallet rule?

No. The proposal is reportedly under consideration and has not been formally adopted.

Which South Korean exchange has the highest reported cold storage percentage?

Upbit reportedly holds more than 99% of customer assets in cold wallets.

Why is South Korea changing its cold wallet requirements?

The discussion follows the reported $6.3 billion Binance cyber attack and concerns about protecting customer assets.

Are crypto cold wallets completely safe?

No. They reduce certain online security risks but remain vulnerable to poor key management, insider threats, and physical security failures.

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