Bank of Korea Opens First Crypto Risk Probe Into 18 Banks, 13 Brokerages

South Korea's central bank wants to know exactly how deep its banks and brokers have waded into crypto. Starting October 23, the Bank of Korea began circulating a document called the "Survey on Financial Institutions' Entry into the Virtual Asset Market," aimed at 18 banks and 13 brokerages across the country.

The bank list reads like a who's who of Korean finance: KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — the five largest lenders — are all in scope. It's the first time the central bank has run a targeted inquiry like this into traditional finance's expanding crypto footprint.

The questionnaire digs deep. Regulators want the organizational setup and budgets each firm has carved out for virtual assets, how far along their market-entry plans are and what comes next, what's motivating the push, and how much they've invested in crypto companies at home and abroad. Existing risk assessments and management frameworks are on the list too.

Then come the stress tests. One scenario asks what happens if South Korea's biggest crypto exchange by market share is forced to halt operations over a major hack or similar shock. Another models a sharp Bitcoin price drop followed by a long stretch of weak trading volumes. A third probes contagion — what it would mean for these firms if a different financial institution ate heavy losses tied to virtual assets.

The timing has a purpose. The Bank of Korea says it's building internal reference material as policymakers try to fold virtual assets into the formal rulebook, while noting that banks and brokerages are racing ahead with their own preparations even as comprehensive legislation lags. Regular reporting to the Financial Supervisory Service, officials say, only offers limited visibility — hence the direct approach.

The review lands as crypto and conventional markets look increasingly tangled. In its June Financial Stability Report, the central bank found correlations between crypto and equities spiked during stress periods — early COVID-19 in 2020 and the 2022 rate hikes — and stayed elevated versus historical norms since US spot Bitcoin ETFs arrived in 2024. Earlier Bank of Korea analysis also flagged stablecoins as a transmission channel, pointing to short-term rate volatility and run risk. The survey was launched before a recent large-scale hack at the world's biggest crypto exchange, an incident that underscored exactly the kind of operational shocks officials are trying to get ahead of.