Korea Financial Security Institute Begins Smart Contract Verification Framework, Tool Development

The Financial Security Institute is launching a smart contract security framework as digital-asset services expand.

Edaily reported on May 11 that the institute identified three core tasks as tokenized securities, or STOs, move toward institutionalization and South Korea advances second-stage virtual-asset legislation: developing verification tools, establishing a security verification framework and training specialized personnel.

The institute plans to develop a security verification tool that automatically detects vulnerabilities in smart contracts used in digital-asset services such as tokenized securities and stablecoins. It will design detection rules around vulnerabilities frequently found in financial services, including reentrancy attacks, access-control setting errors and missing collateral checks. It also plans to keep refining review standards to reflect South Korea's financial regulatory environment and use artificial intelligence-based code analysis to improve detection accuracy.

It will also set verification procedures and standards to help financial firms use smart contracts safely. The framework will cover the full cycle from development and deployment to operations and include a security checklist. The institute also plans to publish a Smart Contract Security Guide for financial companies and support practical adoption through pilot inspections.

The institute is also moving to train specialized personnel. It plans to run seminars and consultative bodies for working-level staff at the institute and financial companies to share understanding of digital assets and blockchain, major types of vulnerabilities and security incident cases. It will also build a cooperation network involving the financial industry and private security companies to share the latest attack methods and response cases on an ongoing basis.

The institute said smart contracts represent the core business logic of digital-asset services, meaning security vulnerabilities could lead to large-scale asset losses. It added that a preemptive response is needed because stolen assets are effectively difficult to recover.

Park Sang-won, president of the Financial Security Institute, said smart contract security is essential to securing trust in the digital-asset market. He added that the institute will continue expanding the security support needed by the financial industry, including building a verification framework and providing guidance materials.