Binance Ignores South Korean Police, Partially Freezes Upbit Hack Funds — Here's the Reason

Binance's Partial Compliance: South Korean police requested Binance to freeze 470 million won linked to the Upbit hack, but only 80 million won (17%) was frozen due to the need for further verification, highlighting issues in cross-border crypto enforcement.

Legal Gaps in Fund Recovery: There is no binding legal mechanism in South Korea that requires foreign exchanges to comply with domestic police requests for fund freezes, complicating recovery efforts for stolen assets.

Regulatory Response: The incident has sparked discussions in South Korea about stricter digital asset regulations, with proposals that could require exchanges to compensate users for losses from hacks, similar to bank liability standards.

Future Framework: Proposed regulations under the Digital Asset Basic Act may take effect as early as January 2026, emphasizing tougher audits, security requirements, and penalties to address cybersecurity as a systemic risk.