South Korea is moving to push cold wallet reserves to 99%, but don’t rush to treat this as a finalized regulation.
According to a November 3 report by PANews citing South Korea’s News1, industry sources say the Financial Services Commission held an emergency security review meeting with major exchanges and custodians on November 2. Using the Binance hack as an impetus, they discussed raising the required cold wallet reserve ratio for exchanges from the current minimum of 80% under the Virtual Asset User Protection Act to around 99%, a level maintained by some major exchanges. The report says that over 99% of Upbit users’ assets are held in cold wallets, compared with about 94% at Bithumb, around 85% at Coinone, and just over 80% at GOPAX and other exchanges. The proposal is still under discussion and has not been finalized.
Scenario 1: If the 99% target is implemented, leading platforms that already operate at a high level would be barely affected. Smaller and mid-sized platforms operating just above 80% might need to build out their cold wallet infrastructure or reduce hot wallet liquidity, potentially putting pressure on withdrawal experience and operating costs. Scenario 2: If this is only informal guidance rather than a change to the law, the actual impact will depend on how binding it is and what transition period is provided.
Are you more concerned about the 99% figure itself, or how the transition period and exemptions will be determined?
Source: PANews
#BNB
Image 1: South Korea proposes raising exchange cold wallet reserve ratio to 99% · Screenshot from the source page
Image source: https://www.panewslab.com/zh/articles/01a1a180-381e-748c-85e1-71ad384ff1a6
According to a November 3 report by PANews citing South Korea’s News1, industry sources say the Financial Services Commission held an emergency security review meeting with major exchanges and custodians on November 2. Using the Binance hack as an impetus, they discussed raising the required cold wallet reserve ratio for exchanges from the current minimum of 80% under the Virtual Asset User Protection Act to around 99%, a level maintained by some major exchanges. The report says that over 99% of Upbit users’ assets are held in cold wallets, compared with about 94% at Bithumb, around 85% at Coinone, and just over 80% at GOPAX and other exchanges. The proposal is still under discussion and has not been finalized.
Scenario 1: If the 99% target is implemented, leading platforms that already operate at a high level would be barely affected. Smaller and mid-sized platforms operating just above 80% might need to build out their cold wallet infrastructure or reduce hot wallet liquidity, potentially putting pressure on withdrawal experience and operating costs. Scenario 2: If this is only informal guidance rather than a change to the law, the actual impact will depend on how binding it is and what transition period is provided.
Are you more concerned about the 99% figure itself, or how the transition period and exemptions will be determined?
Source: PANews
#BNB
Image 1: South Korea proposes raising exchange cold wallet reserve ratio to 99% · Screenshot from the source page
Image source: https://www.panewslab.com/zh/articles/01a1a180-381e-748c-85e1-71ad384ff1a6
