South Korea: Seven crypto exchanges pass inspection

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Seven cryptocurrency exchanges in South Korea passed the security inspection conducted by the government. The Minister of Science and IC, the Ministry of Economy and Finance and the Korea Internet and Security Agency (KISA) conducted the security inspection of the cryptocurrencies.

Reportedly, the government conducted 85 inspection points on the cryptocurrencies to check on their security. The exercise was performed from September to December 2018.

The seven exchanges include Gopax, Upbit, Bithumb, Korbit, Coinone, Huobi Korea and hanbitco. Authorities had inspected 38 crypto exchanges. Twenty-one of them have previously been examined between January and March last year, while the other 17 were being investigated for the first time.

The second inspection of the 21 exchanges was to follow up on security recommendations made during the previous inspection. The seven have been approved because they have since made the necessary improvements to meet the inspection checklist.

The remaining 14 have been deemed to have weak security according to the authorities. The agencies stated the exchanges have “insufficient establishment and management of security systems such as basic PC and network security.” Reportedly, the exchanges need to improve on 51 security items to pass the inspection.

According to reports, the overall security level of the 17 new crypto exchanges was found to be weak. The exchanges lacked proper arrangements such as dedicated security and management system, crypto deposit and withdrawal controls, a password management system, and a system to monitor their crypto wallets. Newsprime stated:

“By examining 85 items of the basic security requirements for 17 newly identified exchanges, it has been confirmed that the security level is generally weak due to the lack of 61 [security] items on average.”

Authorities in the country have been taking actions to ensure all crypto related business are up to standard. Since the emergence of cryptocurrencies, South Korea has lost millions of dollars in crypto through hacks. Most notable events include Bithumb hack which led to over $30 million being stolen, while Conrail’s hack resulted in more than $40 million worth of crypto being taken. Authorities have managed to charge some of the hackers but the nature of cryptocurrencies has made their work much harder.