South Korea Tightens Grip On Crypto Exchanges, Imposes Bank-Level Standards
South Korea moved to tighten guidelines for cryptocurrency platforms after a serious breach at Upbit that despatched shockwaves by means of the native market and authorities halls.
Government Pushes Bank-Level Rules
According to authorities and business reports, the Upbit breach on November 27, 2025 concerned the switch of about 104 billion tokens on the Solana community in roughly 54 minutes.
The worth of the tokens was reported at about 44.5 billion gained, equal to roughly $30–36 million. Upbit stated it might cowl buyer losses from its personal funds, however officers say present regulation doesn’t pressure exchanges to reimburse customers routinely.
The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have begun drafting guidelines that will maintain digital asset service suppliers to bank-level liability standards, requiring obligatory compensation for purchasers hit by hacks or system failures.
Past Failures Put Pressure On Regulators
Reports have disclosed that the 5 greatest exchanges in Korea — Upbit, Bithumb, Coinone, Korbit and Gopax — had been cited in official information displaying 20 system failures between 2023 and September 2025.
Those incidents affected greater than 900 customers and prompted mixed losses of about 5 billion gained. Regulators say these prior issues, plus the latest Solana transfers, highlighted gaps in client safety and operational stability that present guidelines don’t shut.
Exchanges Face Higher Costs And Fines
Under the proposed measures, exchanges would want to fulfill stronger IT safety and custody requirements, undergo common audits, and preserve clearer restoration plans.
Penalties are additionally being rethought. Current most fines had been a set 5 billion gained in earlier laws; new drafts reportedly embrace fines as much as 3% of an trade’s annual income for critical breaches.
That type of publicity might push corporations to lift spending on safety and insurance coverage, and it could change how they worth providers.
What It Means For Users And Markets
According to business analysts, forcing obligatory compensation would increase client confidence. That is the said purpose. But restoring belief will possible take time.
Some exchanges have already promised voluntary payouts after the Upbit incident, but a authorized requirement would mark an enormous shift in how crypto platforms are handled in contrast with banks and digital cost corporations below the Electronic Financial Transactions Act.
Timeline And Lawmaking Steps
Based on reviews, the draft guidelines are at the moment below inside evaluate inside the FSC and might want to cross by means of formal legislative processes earlier than changing into regulation.
Lawmakers and regulators are deliberating precisely which components of financial institution guidelines ought to apply to crypto corporations, and methods to keep away from stifling competitors or innovation whereas defending clients.
Featured picture from Unsplash, chart from TradingView