South Korea’s FSC weighs raising exchange cold wallet requirement to about 99%

Regulators are considering lifting the offline storage floor from 80%, and some exchanges are already well above it South Korea’s Financial Services Commission is considering raising the share of customer crypto that exchanges must keep in cold wallets from 80% to about 99%. If adopted, nearly every coin a Korean trader parks on an exchange would sit offline. That would leave hackers with a much smaller pile to aim at. What the FSC is weighing Under current rules, domestic exchanges must hold at least 80% of customer crypto assets in cold storage. That floor comes from the Virtual Asset User Protection Act, which took effect on July 19, 2024. The proposal under discussion would push the floor up by roughly 19 percentage points. No new mandatory percentage has been finalized. For now, a higher threshold remains a priority under review, not a rule on the books. Some background on the terms helps here. A hot wallet is connected to the internet, much like the cash drawer at a store register. It is convenient for daily transactions, and it is also the first thing a thief goes for. A cold wallet is kept offline, closer to a bank vault in the back room. Moving funds out of it takes more t...