South Korea is considering raising from 80% to nearly 99% the share of customer assets that crypto exchanges must hold in disconnected cold wallets following the Binance hack, which involved more than $6.3 billion. Regulators held an emergency meeting with major crypto exchanges and custody firms to discuss strengthening asset protection. The proposed increase could reduce liquidity available for withdrawals, exposing investors to delays during periods of high volatility, similar to Bithumb’s roughly 13-hour delay for certain altcoins in August. The theft, which the FBI attributed to the North Korea-linked TraderTraitor group, also exposed security weaknesses at Binance, including inadequate two-factor authentication, poor separation of development and production environments, and an ineffective multisignature approval system.
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