Upbit raises cold storage to 99% after Solana hack as Korea advances bank‑level exchange liability

Upbit (operator Dunamu) will raise its cold‑storage ratio to about 99%, cutting hot‑wallet exposure to under 1% after a late‑November Solana‑linked hack that drained multiple Solana‑based tokens. The exchange had already held roughly 98.3% offline and used an Automatic Tracking Service to freeze around $1.77 million of stolen funds; however, most of the roughly 44.5 billion KRW (~$31 million) loss appears permanently gone and Upbit will cover customer losses from its reserves. The move puts Upbit well above South Korea’s 80% cold‑storage legal minimum and ahead of many global peers. Regulators and lawmakers are simultaneously pressing for tougher rules: the Financial Services Commission is reviewing “bank‑level” liability standards that could force exchanges to compensate users for hack or system‑failure losses, and legislators are accelerating a won‑back stablecoin framework with regulatory drafts expected in December ahead of a January 2026 session. For traders, the higher cold‑storage ratio improves custodian security but reduces hot‑wallet liquidity, potentially slowing withdrawals and widening domestic price gaps (Kimchi premium) during volatility—especially for low‑cap and illiquid tokens supported on Upbit’s platform. Expected consequences include tighter security posture and higher compliance and operational costs for exchanges, with possible short‑term liquidity squeezes and increased price dislocations in Korea.