The Korea Blockchain Association (KBA) has concluded a review into 14 Korean crypto exchanges and passed 12 of them, including Bithumb. The KBA said the 12 exchanges met the minimum standards for cybersecurity.
The exchanges that passed included Korea Digital Exchange (Dexco), CoinOne, NeoFrame, Coin Jest, Korbit, UPbit, OKCoin Korea, Gopax, Hanbit, Bithumb, Huobi Korea and Coin Plug (CPDAX). The two exchanges that did not complete the audit were Komid and Sunny7.
During a press conference, Jhun Ha-jin, the head of the self-regulatory committee, said that security flaws were found on some of the exchanges but refused to give specific examples so as not to inform cyberattackers. It is hardly surprising as two South Korean exchanges have recently suffered major hacks. Bithumb was hacked for $30 million in June, leading to an investigation by the South Korean Ministry of Science and Technology. Coinrail was also hacked for $37 million earlier that month.
The minimum standards for the KBA included having a set minimum total assets, adoption of a cold wallet, anti-money laundering requirements and several more qualifiers. Ha-jin also said that meeting the minimum standards did not necessarily mean that the exchanges are immune from hacks. He also said that there was a "huge gap in the level of handling cybersecurity risks" but refused to give further details.
This comes as South Korean lawmakers are getting ready to make regulations on ICOs and cryptocurrencies. Some lawmakers have revealed draft bills that they plan to submit to the National Assembly this month. Members from the ruling Democratic party and from opposition parties have committed to creating specific crypto regulations which will involve the legal status of cryptocurrencies. They may follow Malta which recently passed specific bills clearing up the regulatory framework.
There will also be a policy debate on the security of crypto exchanges in South Korea on July 19. The debate will be hosted by Rep. Song Hee-Kyung of the LPK and the Korea Internet and Security Agency (KISA). KISA has been performing security inspections of crypto exchanges since earlier this month.