In South Korea, when people speak of “crypto reserves,” they rarely mean a national-treasury holding cryptocurrencies. Rather, the term usually refers to the funds that domestic crypto exchanges are now required to keep in reserve, thanks to recent regulation aiming at greater stability and consumer protection.
Since 2023, under guidelines from the Korea Federation of Banks (KFB), crypto exchanges must hold at least the equivalent of 3 billion won (about US$2.3 million), or 30% of their daily average deposits — whichever is larger.
Even the largest players — such as Upbit and Bithumb — must comply.
As of mid-2025, the top five exchanges in South Korea reportedly hold around US$190 million in “liability reserves,” intended as a buffer to cover withdrawal demands, insolvency risks, or major losses — a move that has helped boost investor confidence amid the crypto sector’s inherent volatility.
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At the same time, the country’s central bank — the Bank of Korea (BOK) — has made it clear that it does not consider cryptocurrencies such as Bitcoin (BTC) or other virtual assets suitable for inclusion in official foreign-exchange reserves. The reasons: extreme price volatility, poor liquidity compared to traditional reserve assets, and failure to meet standards set by global institutions like the International Monetary Fund (IMF).
So why does South Korea — or rather, its exchanges and regulators — hold such amounts? The main logic is risk management and investor protection. Large “liability reserves” ensure that if an exchange collapses, suffers a hack, or faces a wave of withdrawals, it can still honor customer deposits. This helps stabilize the market and strengthens confidence among retail and institutional investors alike.
