Korea’s Largest Crypto Exchange Approved by Gov’t For Having Top Security
Upbit, South Korea’s largest crypto exchange by volume according to CoinMarketCap, has been approved by the Korea Internet and Security Agency (KISA) for having a strong infrastructure in place.
On November 26, Upbit received an information security management system (ISMS) license following the decision of KISA in Dec 2017 to begin requiring any internet and information-related company that generates more than $100 million in annual revenue to obtain an ISMS license.
KISA evaluates every company that applies for an ISMS licence based on a criteria that involves 104 categories and 253 subsections to ensure that the company has a strong internal management system and security protocol in place.
Upbit is the first exchange in the country to obtain an ISMS license from KISA and in the months to come, the agency is expected to request three more exchanges including Bithumb, Korbit, and Coinone to file for ISMS licenses with KISA.
Change in Security
For years, security has been the main issue for top cryptocurrency exchanges in South Korea. The security measures employed by trading platforms were poor to the extent in which the government decided to request commercial banks to temporarily suspend banking services to digital asset exchanges until their internal management systems are overhauled.
In August, KISA discovered that many exchanges in South Korea had subpar security systems in place and said that only Bithumb, Upbit, Korbit, Coinone, Coinlink, Coinnest, Huobi, and Coinplug had decent internal management systems out of dozens of platforms.
At the time, Kim Jeong-sam, the information protection officer at KISA, said:
“There still exists many cryptocurrency exchanges with subpar security systems and as such, investors are cautioned in investing through unrecognized platforms. The government will continue to monitor and evaluate cryptocurrency exchanges to improve the standard of security employed by trading platforms.”
Since then, Bithumb overhauled the infrastructure of its exchange by suspending any trading activity for over a month, and other exchanges implemented major changes to their Know Your Customer (KYC) and Anti-Money Laundering (AML) systems to secure partnerships with local commercial banks.
Upbit, along with several exchanges in the likes of Korbit and Gopax, established industry standards for security and compliance, leading both large and small platforms in the local market.
To obtain the ISMS license, Lee Seok-wu, the CEO of Dunamu, the parent company of Upbit, said that the company had to allocate a large portion of its resources to drastically improve its security protocol to meet the standard of KISA.
Throughout the years ahead, Lee stated that the company will continue to establish a safe, secure, and efficient trading environment by prioritizing investor protection.
“Since early 2018, Upbit has been working tirelessly to improve the platform’s internal management system and security measures to obtain the ISMS license. With top class security experts and tested security systems, the company will continue to create a safe trading environment and protect the data of its investors.”
Infrastructure Has to Improve
In late 2017, South Korea was the main catalyst of the cryptocurrency bull market. The demand for crypto exploded that the prices of cryptocurrencies in the local market had 10 to 40 percent premiums at one point on top of global average prices.
By local investors, the financial market of the country is often described as a copper pan because it heats rapidly but also cools down extremely fast. Considering the nature of South Korean markets, the government is taking a proactive approach in solidifying the infrastructure of the local crypto market to be ready for unexpected scenarios.