South Korea Plans to Let Crypto Exchanges Suspend Deposits and Withdrawals

South Korea’s Financial Services Commission (FSC), the country’s financial regulator, plans to issue a no-action letter allowing crypto exchanges to suspend deposits and withdrawals when they suspect a hack, giving them a preventive option before an incident is confirmed.

Current rules generally bar exchanges from blocking withdrawals without legitimate grounds. Hacking-related withdrawal restrictions are allowed only after an incident is clearly established.

The package also seeks continuous monitoring and incident-response capacity, larger cold-wallet balances, and stronger insurance and reserve safeguards. Platforms without 24-hour monitoring would handle deposits and withdrawals only while staff are on duty and give users advance notice.

The plan comes amid recent security incidents at South Korean exchanges. GOPAX suspended trading, deposits and standard withdrawals Friday, Nov. 6, after receiving a hacking threat. A representative said no breach had occurred. Prabang suspended services Oct. 24 after detecting abnormal hot-wallet withdrawals; the platform put its losses at about $70,000.

The FSC previously reviewed exchange access and withdrawal controls after a Binance hot-wallet breach that affected about $6.3 billion in token assets.