South Korea tightens rules after data breaches at banks and crypto exchanges

South Korea wants to tighten the security of banks, crypto exchanges and other financial institutions. Research by the financial regulator shows that dozens of companies have serious security problems.

In various cyber incidents, the personal data of around 100,000 customers has been exposed. The government therefore wants to introduce stricter controls and give companies more responsibility for their digital security.

The South Korean Financial Services Commission (FSC) has examined the digital security of 555 financial companies. At 130 institutions, vulnerabilities were discovered, while 16 companies actually faced security incidents.

According to the regulator, personal data of about 100,000 customers were exposed, including names, contact details and identification numbers.

The crypto sector did not go unnoticed either. Among the affected companies is Streami, the company behind crypto exchange Gopax. In addition, the trading platform is called Prabang, which previously announced that hackers had gained access to customer data on 2 October.

Such data breaches can have major consequences. Criminals can use stolen personal data for identity fraud or targeted scams. Whether that actually happened in these incidents is not yet known.

The problems discovered prompt the FSC to tighten the security requirements. According to the plans, larger financial institutions must now have their systems checked for vulnerabilities at least twice a year.

In addition, the regulator wants to give directors more personal responsibility for the digital security of their organizations. This means that cybersecurity must not only remain a task of technical staff, but also become an integral part of company policy.

Financial institutions also need to exchange information more quickly about new cyber threats. When one company discovers a dangerous vulnerability, other institutions can take action earlier. In the event of acute threats, the FSC also wants to be able to carry out additional inspections without having to wait for a scheduled check.

For crypto exchanges like Gopax, the plans may mean more scrutiny and more investment in protecting customer data.

In addition to stricter controls, South Korea is also looking at the possibilities of artificial intelligence (AI). According to the FSC, this technology can help to identify suspicious activities more quickly, for example in the event of unusual login attempts or possible cyber attacks.

Smaller financial institutions in particular could benefit from this, as they often have fewer staff and resources to constantly monitor their systems.

At the same time, the regulator is investigating whether AI may have played a role in the recent cyber incidents. It also looks at whether different attacks are related to each other and may have been carried out by the same hackers.

The investigation is still ongoing. As a result, it is not clear for the time being whether the affected companies were attacked separately or whether some incidents were part of a larger operation.