South Korea Empowers Crypto Exchanges to Freeze Withdrawals on Suspected Hacks
On November 12, 2026, South Korea's Financial Services Commission (FSC) announced plans to allow crypto exchanges to suspend deposits and withdrawals immediately upon suspected hacking. This measure aims to enhance consumer protection and enable quicker responses to security threats, following recent incidents at GOPAX and Prabang.
South Korea allows crypto exchanges to freeze deposits and withdrawals on suspected hacks.
The measure follows incidents at GOPAX and Prabang.
The FSC is considering raising the cold storage ratio above 80%.
The goal is to enhance consumer protection and enable faster threat response.
Story
South Korea's Financial Services Commission (FSC) plans to issue a "no-action letter" allowing crypto exchanges to suspend deposits and withdrawals when a hack is suspected, without waiting for confirmation. This decision, announced on November 12, 2026, follows recent security incidents, including GOPAX suspending operations after a threatening email and Prabang losing approximately 100 million won (about $70,000) from its hot wallet on October 24. The FSC is also considering raising the minimum cold storage ratio for exchanges, currently at 80%. This regulatory shift aims to enhance consumer protection and allow exchanges to react more swiftly to potential security threats. While it could improve security, the specifics of how "suspected hacking" will be defined and the duration of freezes will be crucial to prevent arbitrary actions that could impact user liquidity. The FSC has already urged exchanges to tighten their security protocols, and this measure is part of a broader initiative to enhance cybersecurity within South Korea's financial sector.
Issue context
The crypto market is in a corrective phase on November 12, 2026, marked by declining prices and a general risk-off sentiment. Bitcoin and Ethereum are experiencing significant drops, and the total market capitalization has fallen by almost 4% in the last 24 hours. Despite this, funding rates for major cryptocurrencies remain positive, indicating that long positions are still paying short positions in perpetual futures markets. This could signal continued leverage even amidst the current downtrend. Market sentiment, as measured by the Fear & Greed Index, stands at 29, indicating "Fear." This development is accompanied by substantial outflows from institutional crypto ETFs, pointing to waning demand from large investors.
Current market movements indicate increased volatility and a tendency towards risk reduction. Pay attention to open interest developments and ETF flows, as these indicators can influence market direction. Be aware that regulatory changes and large on-chain transactions can quickly shift sentiment. Remain vigilant and consider the heightened risks in a deleveraging environment.
Market pulse
Fear & Greed
29
Fear
BTC Funding
+0.0075%
20 perp markets · Open Interest $36.1B
BTC Open Interest
$36.1B
24h volume $59B · basis +0.064%
ETH Funding
+0.0051%
20 perp markets · Open Interest $21B
More from this issue
This story is part of the Biturai Market Brief and is for informational purposes only. No investment advice.