South Korea to impose bank-level liability on crypto exchanges after Upbit hack: Report

South Korea's Financial Services Commission (FSC) is reviewing new regulations that would impose bank-level, no-fault liability on cryptocurrency exchanges. This means exchanges would be required to compensate customers for losses from hacks or system failures, even if the platform was not directly at fault, mirroring standards applied to banks under the Electronic Financial Transactions Act. This regulatory push follows a November 27 incident where Upbit lost over 104 billion Solana-based tokens. Furthermore, regulators are reacting to recurring outages, with the five major exchanges reporting 20 system failures since 2023. The proposed legislative revision is also expected to mandate stricter IT security, higher operational standards, and potentially fines up to 3% of annual revenue for hacking incidents, a significant increase from the current maximum fine of $3.4 million. Political scrutiny has also focused on Upbit's delayed reporting of the hack.

(Source：Cointelegraph)