The Bank of Korea (BOK) is urging South Korea to add circuit breakers and real‑time safety checks to crypto trading after a massive payout error at Bithumb briefly flooded users with tens of billions of dollars in Bitcoin.
In a new payments report, the BOK calls for crypto exchanges to introduce circuit breakers similar to those on the Korea Exchange (KRX). These tools would pause trading during abnormal price swings or large technical errors, so platforms can verify balances before markets spiral out of control.
The push comes after Bithumb accidentally sent out about 620,000 Bitcoin, worth roughly $42 billion, to customers in early February. The system treated what should have been 620,000 Korean won (around $400) as 620,000 BTC, creating huge phantom balances.
As some users rushed to sell, Bitcoin’s price on Bithumb crashed, and panic spread across the platform before the exchange froze accounts. Bithumb later said it halted trading and reversed most transfers within minutes, but users still dumped 1,786–1,788 BTC, leaving a shortfall of about $125 million that Bithumb covered from its reserves.
What the Bank Of Korea and Regulators are Proposing
The BOK says the error showed that existing controls and regulations are not enough for a fast‑growing crypto market. It wants automatic trading curbs that can halt activity when systems detect abnormal orders, extreme volatility, or large balance mismatches.
In parallel, the Financial Services Commission (FSC) has already ordered exchanges to reconcile internal ledgers with on‑chain wallet balances every five minutes. Platforms must build systems that log each check and trigger an automatic kill switch to halt trading when “large mismatches” appear.
The rule changes also add monthly external audits and asset‑by‑asset public disclosures, pushing exchanges toward bank‑style risk controls rather than the loose tech‑startup standards. Regulators say many platforms relied on manual checks or 24‑hour cycles, which left gaps that the Bithumb event exposed.
Bithumb has promised to restore all client balances and even pay 110 percent compensation to users who sold during the crash window. It also admitted that serious internal system flaws left it vulnerable to human error and possible sabotage, and it is now overhauling its controls.
The exchange is still pursuing a small number of users who did not return the mistakenly received Bitcoin. It has filed for provisional seizure of 7 BTC, worth about $520,000, in local courts after voluntary recovery attempts failed.
