Bank of Korea Surveys Banks, Brokerages on Crypto Businesses, Hacking Risks

The Bank of Korea has begun a survey to gauge how far financial institutions have moved into the virtual-asset market and to assess related risks.

According to the financial industry and crypto sector on Nov. 2, the BOK sent questionnaires on Oct. 23 to 18 domestic banks and 13 securities firms on their crypto-related business operations. Those surveyed include South Korea’s five largest banks: KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.

The survey is focused on how actively financial firms are participating in crypto businesses and on potential risks stemming from the market’s expansion. The BOK asked about dedicated crypto teams, budget size, the reasons for pursuing new businesses, and investment status in related companies at home and abroad.

The central bank is also closely examining whether major shocks in the crypto market could spill over into the broader financial sector. It asked firms to assess the impact if South Korea’s largest crypto exchange temporarily suspends operations because of a hack or other incident, or if a sharp drop in Bitcoin prices and a prolonged trading slump persist.

The risk assessment also includes scenarios in which other financial institutions suffer large losses from crypto-related incidents. The BOK is also checking each firm’s response framework and risk-management status for such events.

The survey appears aimed at reviewing in advance how closely the financial sector is linked to the crypto market as debate continues over bringing virtual assets into the institutional financial system. In its Financial Stability Report published in June, the BOK said the impact of crypto price swings on the stock market and foreign-exchange supply and demand warrants close attention.

The BOK plans to collect responses from financial firms through Nov. 4 and use them for internal review. A BOK official said the crypto market still has strong growth potential and financial firms are also showing interest as they seek new businesses and customers. The survey is intended to identify risks that could emerge as the market expands.