The Korea Web3 Conference Focuses on Stablecoin Security: Experts Analyze Risks and Regulatory Trends

Recently, a highly anticipated Web3 conference was held in Seoul, South Korea. This two-day event attracted numerous entrepreneurs, institutions, and investors who engaged in in-depth discussions around cutting-edge trends such as DePIN, security tokens, stablecoins, accomplices, and DAO.

During the main forum session, an audit partner from a security company delivered a keynote speech titled "Elevate Security Journey On Emerging Tracks," focusing on the role and risk control of stablecoins and accomplice services in the financial landscape.

The expert pointed out: "Security is not only a means of defense but also the core infrastructure that connects traditional finance with digital assets. In the face of emerging fields, it is essential to plan ahead and proactively address potential risks."

In his speech, he defined stablecoins as "digital tokens designed to maintain stable value" and pointed out: "Their structures are diverse, including fiat-backed, cash-collateralized, physical asset-supported (such as gold, real estate, silver) and algorithm-driven types, among others. Each type has its unique security challenges and risk management requirements."

Regarding the issuance and circulation mechanism of stablecoins, he explained: "Reserve assets are usually held in trusted financial institutions, such as banks, and issued through smart contracts, then circulated to the market via exchanges and financial institutions." In light of the rapid expansion of the stablecoin market, he emphasized: "We are at a critical juncture where we must accurately identify and systematically respond to its potential risks."

Experts categorize the main risks of stablecoins into three types: reserve risks, such as asset fraud, non-compliant assets, and insufficient liquidity; operational risks, such as abuse of authority and non-compliance with AML or KYC; on-chain risks, including network defects, smart contract vulnerabilities, and oracle price manipulation.

He suggested establishing a multi-dimensional security response system, including reserve proof, smart contract auditing, governance mechanism auditing, blockchain reliability verification, and circulation monitoring.

The expert also shared significant events related to stablecoins over the past decade (2014~2024). According to the introduction, there have been a total of 24 publicly reported major incidents, including: 7 attack incidents caused by contract or on-chain vulnerabilities, 3 de-pegging incidents due to design flaws or insufficient reserves, and 14 anchoring failure incidents caused by regulatory or liquidity issues. He emphasized: "We must keep pace with industry developments to ensure that the regulatory and security systems evolve in sync and do not fall behind the speed of market growth."

In response to the frequent risks associated with stablecoins, global regulatory agencies are also accelerating the establishment of regulatory frameworks. Regulatory bodies in multiple countries and regions have successively issued compliance guidelines for stablecoins, focusing on core issues such as user protection, legal statements, and financial risk prevention. Security companies are also actively participating, maintaining close cooperation with several regulatory agencies, and sharing relevant insights in a timely manner to support the steady progress of the industry's compliance process.

The expert also introduced a case study of an internal simulation research project called "Chocolate Coin." He pointed out: "Chocolate Coin is a standard stablecoin designed based on the ERC-20 standard, encompassing complete components such as smart contracts, white papers, risk management policies, and redemption mechanisms, aiming to provide a practical model for global regulators and practitioners to verify risk factors and policy feasibility."

In the field of custodial security, he also shared a case study of a client project. The expert stated: "We provide comprehensive security assessment and consulting services covering various threats that may arise at all stages including private key generation, storage, recovery, and usage, encompassing penetration testing, source code review, and custodial solution architecture assessment, forming a comprehensive service package." He added: "This project has also been submitted as compliance material to the Hong Kong Securities and Futures Commission (SFC) and used by several core clients."

According to reports, the theme of this blockchain conference is investment practice, focusing on projects that truly possess feasibility, profitability, and a real user base, emphasizing the genuine value and market adaptability of projects. The conference invited global blockchain experts, DAO organizers, practical investors, researchers, and traders to provide high-quality insights from an investor's perspective. The event also includes interactive sessions such as project showcase areas, security demonstrations, and offline networking, aiming to provide a credible platform for community members and individual investors to understand and engage with quality Web3 projects.