Two-third of cryptocurrency exchanges failed to pass a compulsory security audit issued by the Korean government.

An exact number of 21 cryptocurrency exchanges have been thoroughly inspected by 3 separate departments – The Ministry of Science and ICT, the Korea Internet & Security Agency starting from September through to December 2018, on 85 different security aspects.

Of those 21 exchanges, only 7 of them, including Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco, and Huobi Korea successfully passed every one of the tests, according to CoinDesk Korea.

The rest of them, whose names are yet to be revealed, is said to be “vulnerable to hacking attacks at all times because of poor security” by the Ministry of Economy and Finance. The failures are noted down as “insufficient establishment and management of security systems such as basic PC and network security.”

The tests focused on various different angles of the exchanges, including administrative, network, system and operational security, as well as database backup and wallet management.

South Korea has suffered the loss of millions of dollars in cryptocurrencies due to the hacks happened at exchanges like Coinrail (over $40 million) or Bithumb (over $30 million).

The officials or the South Korean government have strongly stated that it was the hackers from their close neighbor – North Korea – that performed the attacks. Lazarus, the notorious organizations of hackers of this country has in fact been reported to be the group responsible for the 571$ million in cryptocurrencies theft since January 2017, according to a report from cybersecurity vendor Group-IB.

Facing the alarmingly increased rate of security breaches, in July 2017, South Korea’s Financial Services Commission has urgently tried to get politicians to pass a bill regulating domestic cryptocurrency exchanges to counter lax security in the industry.