South Korea to Allow Crypto Exchanges to Freeze Operations on Hacking Suspicion

Key Facts

South Korea's Financial Services Commission (FSC) plans to issue a no-action letter allowing crypto platforms to suspend operations upon suspicion of hacking. Crypto Briefing reported that the regulator aims to shift the threshold for freezing deposits and withdrawals to suspected breaches rather than confirmed ones to prevent asset theft.

The regulatory shift follows a wave of cyber incidents affecting more than 37 financial firms in South Korea between late September and early November 2026, resulting in losses of approximately 1 billion won. Recent cases include the GOPAX exchange suspending operations on November 6, 2026, following a threat, and Prabang pledging customer compensation after losing 100 million won from its hot wallet on October 24, 2026.