South Korea plans preemptive deposit, withdrawal blocks at crypto exchanges

South Korea’s Financial Services Commission discussed allowing domestic crypto exchanges to preemptively suspend deposits and withdrawals when a security breach occurs or signs of possible intrusion, such as abnormal external access attempts, are detected. This measure aims to prevent user losses from spreading. Currently, under the Virtual Asset User Protection Act, operators cannot block deposits and withdrawals without just cause, and such actions are only permitted after a clear hacking incident. The commission plans to issue a non-action opinion to enable operators to take preemptive steps when hacking or security breaches are suspected, emphasizing that rapid restrictions are essential to minimize user losses in crypto security incidents, as demonstrated by the Binance hack.

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