Bank of Korea surveys 31 financial firms on crypto risk exposure

Key points

• One scenario asks how firms would cope if South Korea's largest exchange by market share paused operations after a major hack.
• The survey predates the previous week's $6.3bn Binance hack, which US authorities have attributed to North Korean hackers.

The Bank of Korea has begun surveying 31 financial institutions on their exposure to crypto risks, according to The Herald Business and Yonhap, citing industry sources. The review, reported as the central bank's first look at financial firms' participation in the virtual asset market, started on 23 Oct and covers 18 banks and 13 brokerages.

The survey asks about crypto staffing, budgets, business activities and the reasons firms entered the market, along with sums invested in domestic and overseas crypto companies. Institutions are also asked how they would be affected if South Korea's largest exchange by market share suspended operations after a major hack, if prices fell sharply and trading stayed weak, or if another financial institution took heavy losses from a crypto incident.

Stablecoin work continues

The exercise began before the previous week's $6.3bn Binance hack, which US authorities have attributed to North Korean hackers, but Cointelegraph reports that the incident illustrates the kind of risk under examination. Responses are reportedly due on 4 November.

The review comes as South Korean firms keep testing stablecoin services. KB Financial Group finished a won-denominated stablecoin pilot in May, and Kakao Pay and KakaoBank teamed up with Fireblocks in September. The Bank of Korea has backed bank-led stablecoin issuance, while disagreement over who should be allowed to issue them has held up the proposed Digital Asset Basic Act.

What to watch: Survey responses from the 31 financial institutions are reportedly due on 4 November.

Read the full story on Cointelegraph →