The Bank of Korea recommended introducing circuit breakers — automatic trading halts during sharp price swings — on local crypto exchanges.
The initiative follows the Bithumb incident, where the exchange mistakenly sent clients 620,000 Bitcoin (BTC) instead of 620,000 won.
Related: South Korea Plans to Regulate RWA and Stablecoins Under Existing Financial Laws
In its payment systems report published on Monday, the regulator noted that the crypto industry currently has weaker internal controls compared to traditional financial institutions. This raises the risk of similar errors on other platforms.
What Happened on Bithumb
In early February, a Bithumb employee mistakenly denominated a promotion reward in bitcoin instead of South Korean won. As a result, clients received BTC▲$65,915.00 worth approximately $43 billion instead of $400.
Bitcoin’s price on the exchange plunged nearly 15% due to mass selling. Bithumb managed to halt trading and cancel most transactions within 20 minutes. However, 1,788 BTC (approximately $125 million at the time) had already been sold. The exchange covered the losses from its own reserves.
Related: Polkadot Price Slides 4% as Hyperbridge Exploit Mints 1B Tokens
Regulator’s Proposals
The Bank of Korea believes crypto exchanges should be required to implement systems capable of:
- Quickly identifying and blocking erroneous payments caused by human error
- Automatically reconciling internal asset balances with blockchain data to detect discrepancies
- Halting trading during abnormal price fluctuations (circuit breakers)
The regulator recommended including these measures in the upcoming Basic Act on Digital Assets, which is expected to establish stricter rules for the industry.
Following the incident, Bithumb postponed its IPO plans until 2028 and faced serious investigations from local authorities.
