Fourteen South Korean Exchanges Fail Gov’t Security Check, Seven Pass It

Published on [Date] by Cryptovest Staff

Bithumb, Upbit, Huobi Korea, Korbit, Gopax, Coinone, and Hanbitco have been named as secure in a recent audit by the South Korean authorities.

Two-thirds of South Korean cryptocurrency exchange operators have significant security flaws, a joint audit by governmental bodies has shown. A total of 21 platforms were inspected and only seven passed the check, local media Seoul.co.kr reported on Thursday.

A team from the Ministry of Economy and Finance, the Korea Internet and Security Agency (KISA) and Ministry of Science and Information and Communication Technology conducted the audit from September to December 2018. The security check included 85 criteria, including an analysis of crypto deposit and withdrawal systems, as well as a monitoring of custodian services, password management systems and issues related to the management structure.

Bithumb, Upbit, Huobi Korea, Korbit, Gopax, Coinone, and Hanbitco passed the test.

The remaining fourteen exchanges have various vulnerabilities in their systems, the audit showed. The flaws allow “hacking attacks at all times because of poor security,” the Ministry of Economy and Finance stated. The Ministry did not disclose the names of the operators that failed in the check.

Separately, on Friday, Bithumb announced that it had obtained an information security management system (ISMS) license from the Korea Internet and Security Agency. The exchange, which was the victim of a $30 million hack attack in June 2018, said that the permit shows the company is committed to robust anti-money laundering (AML) practices and know-your-customer (KYC) procedures.

The permit is obligatory for every internet business that has revenue of more than $100 million for the last year, and its average daily visitors exceeds one million, as measured over a three-month period. According to Seoul.co.kr, Upbit, Coinone, and Korbit have also been awarded ISMS recently. Last month, local prosecutors accused Upbit of $226 million fraud through a corporate account.

South Korea has become one of the crypto hubs in Asia-Pacific after the 2017 China ban on crypto trading. However, after several hack attacks, the authorities have toughened their approach towards the virtual asset industry with on-site inspections of exchange operators and the banning of the initial coin offering (ICO) model.