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- The Bank of Korea surveyed 31 financial institutions about potential crypto market risks.
- The assessment examines how exchange shutdowns, price slumps, and firm losses impact businesses.
- Officials intend to use the collected responses internally for sector risk reviews.
The Bank of Korea is asking 31 banks and brokerages how an exchange shutdown, a crypto market slump or heavy losses at another financial firm would affect them.
The survey covers 18 banks and 13 brokerages, with responses due Nov. 4. It began on Oct. 23, before last week’s Binance hack.
Survey Covers Exchange Shutdowns and Losses at Other Firms
One scenario asks what would happen if South Korea’s largest crypto exchange by market share temporarily stopped operating after a major hack or similar incident. The bank wants firms to assess the effect on their own businesses.
Another combines a sharp fall in Bitcoin and other crypto prices with a prolonged slowdown in trading. A third asks about the risks of another financial institution suffering substantial losses from a crypto-related incident.
Review Covers Crypto Investments, Budgets, and Risk Controls
The banks surveyed include KB Kookmin, Shinhan, Hana, Woori and NH NongHyup. The review asks about crypto-related staffing, organizational structures and budgets, alongside existing activities and plans for entering the market.
The central bank also wants to know how much institutions have invested in crypto-related companies in South Korea and overseas. The questions extend to why firms want to expand into the sector and how they assess and manage the risks involved.
A Bank of Korea official said routine financial reporting leaves gaps in the information available on crypto-related activities. The central bank wants basic data from individual banks and brokerages as they prepare new businesses.
Bank of Korea officials described the exercise as an early check on possible problems while financial firms pursue new customers and business opportunities. The responses are intended for internal reference as the bank reviews the sector’s crypto involvement.
Banks Already Have Financial Ties to Crypto Exchanges
Banks already handle customer cash connected to crypto trading. South Korea’s user-protection rules, introduced in July 2024, require crypto service providers to keep customers’ cash deposits separately at banks. Banks manage the deposits under custody agreements, invest them in assets such as government bonds and pay yields to the crypto service providers.
If a provider goes bankrupt or loses its registration, the custodian bank is responsible for returning that segregated cash directly to customers. Banks therefore have operational responsibilities tied to exchanges even where they do not hold the cryptocurrencies being traded.
The Financial Services Commission reported in October that average daily crypto trading volume fell 44% in the first half of 2026 compared with the preceding six months. Exchange operating profits dropped 78% over the same period.
For a financial firm invested in a crypto exchange, less trading can mean a weaker business behind that investment. Owning Bitcoin is only one way to have money at stake in the market.
