South Korea orders crypto exchanges to verify holdings every 5 minutes
An inspection found slow reconciliation cycles and weak trade-halting systems across major crypto exchanges.
South Korea's Financial Supervisory Commission (FSC) has mandated that cryptocurrency exchanges verify their digital asset holdings every five minutes, following a comprehensive inspection that revealed significant operational deficiencies. The new regulation comes after authorities discovered slow reconciliation cycles and inadequate trade-halting systems across the country's major crypto trading platforms.
The inspection, conducted by South Korean financial regulators, identified critical gaps in exchange operations that could potentially expose investors to risks. Authorities found that existing verification processes were insufficient, with some platforms taking excessive time to reconcile their holdings and implement necessary trading suspensions when required. The five-minute verification requirement represents a dramatic tightening of oversight standards for the industry.
This regulatory development positions South Korea among the most stringent crypto regulatory environments globally, as the country continues strengthening its digital asset oversight framework. The new rules are expected to increase operational costs for exchanges while potentially improving investor protection and market stability. Compliance with these enhanced verification requirements may force smaller exchanges to upgrade their technical infrastructure or exit the market entirely.
Market participants will be closely monitoring how major South Korean exchanges adapt to these new requirements and whether similar measures are adopted by other jurisdictions. The implementation timeline and specific technical standards for the five-minute verification process are expected to be announced in the coming weeks.
Source: Cointelegraph
