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<p>South Korea's Financial Services Commission and National Assembly propose a 3% revenue fine for crypto exchanges, responding to a major hack at Upbit in November 2025.</p>
<p>This move could enforce stricter security standards, aligning crypto exchanges with traditional financial institutions, potentially impacting operational costs and investor confidence.</p>
<h2 id="south-korea-proposes-3-revenue-fines-for-exchange-hacks">South Korea Proposes 3% Revenue Fines for Exchange Hacks</h2>
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 <p>The <a href="https://phemex.com/news/article/south-korea-to-strengthen-crypto-exchange-regulations-after-upbit-hack-42729" rel="noopener noreferrer nofollow">South Korean Financial Services Commission</a> (FSC), in collaboration with the National Assembly, is advancing amendments to the <a href="https://phemex.com/blogs" rel="noopener noreferrer nofollow">Electronic Financial Transactions Act</a>. This seeks to impose fines up to <strong>3% of annual revenue</strong> on virtual-asset exchanges.</p>
 <p>The <strong>proposed regulations</strong> target security breaches like the <a href="https://phemex.com/news/article/south-korea-to-strengthen-crypto-exchange-regulations-after-upbit-hack-42729" rel="noopener noreferrer nofollow">2025 Upbit hack</a>, which involved Solana tokens. <strong>Strict liability</strong> and system reliability standards will align exchanges with bank-level regulations. These <strong>proposals</strong> respond to security lapses affecting <a href="https://phemex.com/markets" rel="noopener noreferrer nofollow"><strong>major exchanges</strong></a>.</p>
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<h2 id="fines-could-reshape-exchange-security-and-compliance">Fines Could Reshape Exchange Security and Compliance</h2>
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 <p>The potential <strong>fines aim</strong> to enhance trust in the digital asset market, prompting exchanges to bolster security measures. South Korean exchanges face increased compliance costs, potentially leading to higher <strong>operational budgets</strong> or <strong>capital reserves</strong> to manage liabilities.</p>
 <p>Current paradigms in countries treating institutions as <strong>strictly liable for breaches</strong> could reshape virtual asset security protocols. If adopted, this <strong>regulatory change</strong> could influence global crypto oversight trends, echoing measures in banking regulatory frameworks.</p>
 <blockquote>
  "The current limits of penalties under existing law do not suffice; we need stricter enforcement tools." — Lee Chan-jin, Governor, Financial Supervisory Service (FSS)
 </blockquote>
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<h2 id="past-hacks-drive-stricter-security-regulations-in-korea">Past Hacks Drive Stricter Security Regulations in Korea</h2>
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 <p>The 2019 <a href="https://phemex.com/margin/trade" rel="noopener noreferrer nofollow"><strong>Upbit ETH hack</strong></a> set a precedent by exposing vulnerabilities in systems <strong>not covered</strong> by stringent no-fault liabilities. This history underscores the shifting regulatory landscape towards more robust consumer protection measures.</p>
 <p>Analysts at <a href="https://phemex.com/news/article/sec-meeting-highlights-regulatory-divide-on-asset-tokenization-42385" rel="noopener noreferrer nofollow"><strong>Kanalcoin</strong></a> predict these changes may tighten Korea's crypto industry, possibly limiting new entrants while strengthening market resilience. <strong>Data comparisons</strong> suggest improved safeguards benefiting long-term investor confidence and institutional involvement.</p>
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    <td><em><strong>Disclaimer</strong>: This <a href="https://www.kanalcoin.com/" rel="noopener noreferrer nofollow"><strong>website</strong></a> provides information only and is not financial advice. Cryptocurrency investments are risky. We do not guarantee accuracy and are not liable for losses. Conduct your own research before investing.</em></td>
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</figure> <a href="https://www.kanalcoin.com/south-korea-crypto-exchange-hacks-fines/" rel="noopener noreferrer nofollow">Read original article on kanalcoin.com</a>

South Korea Proposes 3% Fines for Crypto Hacks

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