South Korea’s Financial Services Commission (FSC) plans to allow crypto exchanges to suspend deposits and withdrawals when hacking is suspected, rather than waiting until a breach is confirmed, amid a push for stronger industry security.

On Thursday, the FSC said it would issue a no-action letter permitting preventive suspensions under certain conditions. Current rules prohibit exchanges from blocking withdrawals without legitimate grounds and explicitly allow restrictions only when a hacking incident is clearly established.

The regulator also called for round-the-clock monitoring and incident response, higher cold-wallet holdings, and stronger insurance coverage and reserves. The FSC said exchanges unable to monitor continuously would…