Bank of Korea surveys 31 financial firms on crypto risks

What happened

The Bank of Korea has started its first reported survey of financial institutions' cryptocurrency activities, questioning 18 banks and 13 securities firms about their exposure and risk controls. The review began Oct. 23 and responses are due Nov. 4, according to Yonhap News Agency. The Herald Business and Yonhap, citing industry sources, reported the scope; Crypto.news said the group includes South Korea's five largest banks, KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.

The questionnaire asks each institution about crypto-related departments, staffing and budgets, existing and planned digital asset businesses, and its reasons for entering the market. It also seeks the amounts invested in domestic and overseas crypto companies and asks how firms identify and manage crypto-related risks. A Bank of Korea official said the purpose was to take stock of the current situation and get an early read on what lies ahead, according to Crypto.news.

The survey presents three risk scenarios. One asks how a firm would be affected if South Korea's largest crypto exchange by market share temporarily suspended operations after a major hack or similar incident. Another considers a steep fall in cryptocurrency prices followed by a sustained trading slump. A third examines the potential fallout if another financial institution suffered heavy losses from a crypto-related incident. The questionnaire does not name an exchange or indicate that a shutdown is expected.

The survey was prepared before Binance disclosed a $6.3 billion security breach on Oct. 29, and the Bank of Korea did not announce the review as a response to that attack. US authorities have attributed the Binance hack to North Korean hackers. The timing nonetheless illustrates the kind of operational and contagion risk the central bank is examining, Cointelegraph reported.

Why it matters

The review matters because South Korean banks are moving into digital asset services even as the rules governing them remain unsettled. KB Financial Group completed a won-denominated stablecoin pilot in May. Kakao Pay and KakaoBank partnered with Fireblocks in September to explore digital asset infrastructure, and Gwangju Bank and Toss completed stablecoin payment testing in October. MoonPay entered the Korean market in September and said it planned to work with local financial institutions, with potential cooperation involving Woori Bank, KB Financial Group and KakaoBank.

That activity can create exposure that traditional regulatory reporting does not fully capture. Officials have said existing reporting covers conventional banking activities but leaves gaps on financial institutions' digital asset businesses. The Bank of Korea has also warned about links between crypto and financial markets. In its June financial stability report, it found that crypto and stock market movements became more closely linked during periods of stress, citing the COVID-19 pandemic and the 2022 global rate increases.

Security is a parallel concern. In October, the Financial Services Commission proposed tougher requirements after finding deficiencies at 130 of 555 financial companies. The proposals include more frequent vulnerability assessments and greater executive accountability, following security incidents involving 16 companies, including crypto exchanges.

What the data shows

The survey covers 31 institutions: 18 banks and 13 securities firms. It began Oct. 23 and responses are due Nov. 4. The bank group includes KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.

Separately, the Financial Services Commission reviewed 555 financial companies and found deficiencies at 130. It cited security incidents involving 16 companies. The Binance breach disclosed on Oct. 29 was valued at $6.3 billion.

Background

The Bank of Korea has previously flagged risks from stablecoins. In a November 2025 report, it warned that won-denominated stablecoins could introduce risks involving collateral shortages, short-term interest rate volatility and financial market stress. The central bank has pushed for bank-led stablecoin issuance, while disagreements over which institutions should be allowed to issue stablecoins have slowed work on the proposed Digital Asset Basic Act.

A Bank of Korea official told The Korea Herald that financial institutions are making their own preparations even as virtual asset legislation moves more slowly than the market expected. The survey is intended as internal reference material while the central bank studies financial-sector developments, according to Crypto.news.

What is still unclear

The questionnaire does not identify the exchange used in its shutdown scenario or establish that such an event is expected. It is also unclear whether the Bank of Korea will publish any findings from the survey or keep the responses internal. The reports describe the exercise as a review of current exposure and risk management, not an enforcement action.

What to watch

The immediate marker is the Nov. 4 deadline for the 31 institutions. How the Bank of Korea uses the responses, and whether it summarizes them publicly, will show whether the survey leads to broader supervisory expectations for banks and brokerages. Also worth watching is progress on the Digital Asset Basic Act and the outcome of the Financial Services Commission's proposed security rules.

Questions readers ask