South Korea will let crypto exchanges freeze withdrawals on suspected hacks

What happened. FSC Vice Chairman Shin Jin-chang chaired the meeting. Supervisors and exchanges attended, including Dunamu (Upbit), Bithumb, Coinone and Streami (GOPAX). Three topics: emergency response rules for attacks, freezing withdrawals on suspected hacks, and exchanges joining the Financial Security Institute.

Why the rule changes. The Virtual Asset User Protection Act bars exchanges from blocking deposits and withdrawals without legitimate grounds and explicitly allows it only when a hack is clear. Exchanges said it was unclear whether they could act on suspicion alone. The FSC cited the Binance hack as a case where speed decides losses. A no-action letter means the regulator will not penalize such a halt if the conditions are met.

What else is required. 24/7 monitoring. Exchanges that cannot monitor around the clock must process deposits and withdrawals only during staffed hours and tell users in advance. The legal cold storage minimum is 80%, and all exchanges already hold more than 95%. The FSC asks them to keep hot wallet balances to a minimum, split them across several wallets, and raise insurance and reserves for payouts.

Next. Only 5 of 28 crypto firms, the won-market exchanges, are members of the Financial Security Institute. The FSC wants the rest to join and will update the exchange security check standard by year end. The planned Digital Asset Act would give exchanges IT safety duties and liability for damages at the level of financial companies.

Confirmed facts

• On November 12, 2026, the FSC held a crypto industry security meeting chaired by Vice Chairman Shin Jin-chang.^[1]
• The FSC decided to issue a no-action letter so exchanges can preemptively block deposits and withdrawals when a hack is suspected.^[1][2]
• Current law bars blocking deposits and withdrawals without legitimate grounds and explicitly allows it only when a hack is clearly established.^[1][2]
• Exchanges without round-the-clock monitoring must process deposits and withdrawals only during staffed hours and notify users in advance.^[1][2]
• The required cold storage share is 80%; in practice all exchanges hold more than 95%.^[1]
• Only 5 of 28 crypto firms, the won-market exchanges, are members of the Financial Security Institute.^[1]
• The planned Digital Asset Act would give exchanges IT safety duties and liability for damages at the level of financial companies.^[1]
• Exchange GOPAX earlier suspended trading, deposits and standard withdrawals after a hacking threat; a representative said no breach occurred.^[2]

Implications

• ConfirmedKorean exchanges will be able to halt withdrawals faster without the risk of breaking the law.
• ConfirmedUsers of smaller exchanges may more often see withdrawals processed only during staffed hours.
• Our readingLoose conditions could lead to freezes without a real threat.

Still unknown

• Exactly which conditions allow a freeze and how long it can last.
• When the no-action letter itself will be issued.
• When parliament will pass the Digital Asset Act.

Who it affects

South Korea, Asia. Users of Korean crypto exchanges and anyone who keeps coins on an exchange

Sources

1. Financial Services Commission (Korea): 가상자산사업자에 대한 최고 수준의 보안 강화 조치를 통해 이용자의 자산과 정보를 철저히 지켜나가겠습니다 November 12, 2026 · official
2. Cointelegraph (via TradingView): South Korea to permit crypto withdrawal freezes during hacking threats November 12, 2026 · media