Bank of Korea Surveys 31 Firms on Crypto Risks

The Bank of Korea has begun surveying 31 financial firms about their cryptocurrency activities and exposure to risks including exchange disruptions, market declines and losses at other institutions, seeking responses by November 4. The survey, which began October 23, covers 18 banks and 13 securities firms. The questionnaire asks about companies’ digital-asset businesses, staffing, budgets, investments in domestic and overseas cryptocurrency companies, and risk-management practices. It also asks why firms entered or are considering entering the market and whether they have dedicated virtual-asset teams. One hypothetical scenario asks how a firm might be affected if South Korea’s largest cryptocurrency exchange temporarily suspended operations after a major security breach. The survey does not name an exchange or indicate that a shutdown is expected. Other scenarios address a prolonged downturn in cryptocurrency prices and trading, and the possibility that losses at one financial institution could affect others. A Bank of Korea official said financial firms were preparing for digital-asset opportunities despite slower legislative progress. The central bank is collecting...