South Korea’s central bank is calling on cryptocurrency exchanges to adopt circuit breakers and strengthen internal controls after a February incident at Bithumb. In a payments report, the Bank of Korea said lawmakers should require measures similar to the Korea Exchange’s trading curbs so platforms can suspend trading during sudden, extreme price swings.
The recommendation follows an operational error at Bithumb in which the exchange mistakenly credited customers with 620,000 Bitcoin instead of 620,000 Korean won. The inflated balances prompted many users to sell, pushing the local BTC price sharply below prices on other venues. Bithumb halted trading and reversed the erroneous transfers within minutes, but about 1,788 BTC had already been sold before the intervention. The exchange covered the resulting shortfall from its own reserves.
The Bank of Korea warned that the virtual-asset industry lacks the internal control frameworks common at regulated financial firms and operates under lighter oversight, increasing the chance that similar incidents could occur elsewhere. Lawmakers are already drafting tighter crypto rules, and the central bank said those reforms should explicitly include measures to improve exchange safety and transparency.
To reduce operational and contagion risks, the central bank proposed that exchanges be required to:
– Implement trading halts or circuit-breaker mechanisms to pause activity during rapid or anomalous price moves
– Deploy systems to detect and prevent erroneous payouts caused by human error or operational failures
– Automatically reconcile a platform’s internal ledger with on-chain holdings to flag discrepancies promptly
The Bank of Korea framed these steps as necessary to prevent operational mistakes from cascading through markets and to bring virtual-asset platforms closer to the operational standards expected of regulated financial institutions.