As South Korea considers raising the requirement for crypto exchanges to hold customer assets in cold wallets to approximately 99%, industry representatives warn that withdrawals could slow.
According to a report by Wu Blockchain citing News1, South Korea’s Financial Services Commission is considering raising the current 80% minimum cold wallet ratio following the recent attack on Binance. The new threshold of approximately 99% has not yet been adopted.
Cold wallets keep the private keys to crypto assets offline. The proposed change would require exchanges to store a much larger share of customer assets this way.
Ratios differ at Upbit, Bithumb, and Coinone
According to data cited in the report, South Korean exchanges currently have the following cold wallet usage ratios:
- Upbit: More than 99% of customer assets.
- Bithumb: Approximately 94%.
- Coinone: Approximately 85%.
Based on these figures, Upbit is already above the discussed level, while the other two exchanges would need to increase their ratios if the plan is adopted as proposed.
How could the security measure affect withdrawals?
Industry participants say that a higher cold wallet requirement could lead to delays in withdrawals and increase operational burdens. Smaller exchanges, in particular, are expected to be more affected by the change.
The issue before the commission is how exchanges will handle daily withdrawal requests while strengthening the protection of customer assets. The regulation is still under discussion; the potential slowdown in withdrawals is an industry warning about its possible implementation.
Not investment advice.