South Korea to Impose Bank-Level Liability on Crypto Exchanges After Upbit’s $30M Hack
The post South Korea to Impose Bank-Level Liability on Crypto Exchanges After Upbit’s $30M Hack appeared on BitcoinEthereumNews.com.
Key Takeaways: South Korea plans to apply bank-level, no-fault compensation rules to crypto exchanges after a major breach at Upbit. Regulators want exchanges to reimburse users for losses from hacks or system failures, even if the platform is not at fault. The upcoming overhaul introduces stricter IT requirements, higher penalties, and expanded oversight, signaling the toughest regulatory shift in Korea’s crypto sector to date. South Korea is preparing one of its most aggressive regulatory responses yet after a high-profile incident at Upbit reignited concerns about weak digital-asset protections. The government now aims to treat crypto exchanges with the same standards as traditional financial institutions, an approach that could redefine operational risk across the entire industry. Read More: Upbit Hit Again: ₩44.5B Solana Hot-Wallet Hack Slams Korea’s Top Crypto Exchange Government Moves to Treat Crypto Platforms Like Banks South Korean regulators have long acknowledged gaps in their digital-asset rulebook, but the latest breach at Upbit strengthened the political urgency to act. Authorities are now pursuing a framework that would require exchanges to compensate users for financial losses regardless of fault, mirroring the liability rules that banks and electronic payment firms must follow. This marks a significant departure from the current system, in which crypto platforms face far fewer obligations. Under existing laws, regulators cannot compel reimbursement even when an exchange suffers a major security lapse. The Upbit hack exposed this shortcoming in real time. On November 27, more than 104 billion won worth of Solana-based tokens, roughly $30 million were transferred out of Upbit to external wallets in less than an hour. Despite the scale of the breach, legal constraints left authorities with limited power to enforce compensation or issue meaningful penalties. For policymakers, this incident was not isolated, it was the latest example of operational fragility within Korea’s crypto sector.…
