Ransomware Chaos: How a Cyber Attack is Shaking Up South Korea’s Housing Market

Seoul Guarantee Insurance, South Korea’s largest provider of guarantee insurance, has been paralyzed by a ransomware attack, with its core systems offline for a third consecutive day.

The crisis began early Monday when SGI detected an “abnormal symptom” in its database system. By Tuesday afternoon, a joint investigation by the Financial Supervisory Service and the Financial Security Institute confirmed the cause as a ransomware breach.

As a crucial player in Korea’s guarantee insurance industry, SGI’s disruption is causing widespread chaos and inconvenience. The insurer, which provides guarantees for both individuals and corporations, reported a guarantee balance of 478 trillion KRW (344.4 billion USD) at the end of 2024.

The impact is particularly acute in the housing market, where many rely on guarantee insurance for the “jeonse” rental system. This unique Korean arrangement allows renters to pay a large, refundable deposit instead of monthly rent. SGI is a leading provider in this niche, offering the highest cap on jeonse loan guarantees at 500 million KRW (375,000 USD), surpassing other institutions’ limits of 200 million to 400 million KRW (150,000 to 300,000 USD).

While some services have been restored through partnerships with financial institutions, SGI’s primary data system remained down as of Wednesday morning. In urgent cases, the company has resorted to issuing handwritten guarantee certificates to minimize disruption.

Starting Wednesday, the insurer launched an emergency center to document consumer complaints and support recovery efforts. “We pledge full compensation and are developing responsible follow-up measures,” SGI President and CEO Lee Myung-soon stated.

This marks the first full-system disruption at a Korean financial institution caused by a ransomware attack and the second such incident involving a Korean company this year. In June, major online bookstore Yes24 suffered a five-day outage and an estimated 10 billion KRW (7.5 million USD) in lost sales due to a similar breach.