Inside South Korea’s crypto shock: Upbit announces 99% cold-storage security overhaul
The country is also contemplating various other crypto market regulations.
South Korea’s biggest exchange Upbit raised its cold-storage ratio to 99% in response to its recent multimillion-dollar Solana breach.
This move comes days after news that regulators are weighing new “bank-level” liability standards for exchanges.
A new security era
According to operator Dunamu, Upbit is moving nearly all customer assets into cold storage after last month’s Solana-related breach. This is one of the most aggressive crypto security moves ever.
The exchange currently keeps over 98% of funds offline, and now plans to push that figure to 99% by cutting hot-wallet exposure to under 1%.
This in response to hackers draining multiple Solana-based tokens in under an hour in late-November.
The move also places Upbit far above Korea’s legal requirement of 80% cold-wallet storage and ahead of most major global exchanges like Coinbase, OKX and MEXC.
A push for bank-level accountability
AMBCrypto previously reported that South Korean regulators are considering stricter liability rules for crypto exchanges in the wake of Upbit’s breach.
The Financial Services Commission is reviewing a framework that would require platforms to compensate users for losses caused by hacks or system failures. This is even in cases where the exchange is not directly at fault.
This standard would be a big improvement in consumer protection for digital assets. This is how banks and e-payment firms have worked so far.
Pressure for stablecoin rules
Lawmakers are also reportedly racing to finalize the country’s long-awaited stablecoin framework.
They have apparently pressed financial regulators to submit a draft bill by the 10th of December, warning that parliament will move ahead without them if the deadline is missed.
The ruling party expects the proposal to be taken up during the National Assembly’s January 2026 extraordinary session.
Regulators clarified that no final decision has been made on whether banks will participate in issuing a won-backed stablecoin.
However, they confirmed that the topic was discussed in a meeting earlier this week. Both sides agreed that the bill must now be prepared as quickly as possible.
Final Thoughts
- South Korea’s Upbit cold-storage is a new, security-first turn for the country’s crypto market.
- With looming bank-level liability rules and stablecoin regulation, exchanges are under pressure.
