Bank of Korea urges crypto circuit breakers after Bithumb error
Bank of Korea urges exchanges to add trading circuit breakers and automated error checks after Bithumb mistakenly sent 620,000 BTC instead of 620,000 won.
The Bank of Korea urged crypto exchanges to install trading circuit breakers and automated error‑detection systems after a February error at Bithumb credited customers with 620,000 BTC instead of 620,000 Korean won, equivalent to about $42 billion at the time.
In a payments report released Monday, the central bank recommended that lawmakers require virtual asset platforms to adopt mechanisms similar to the Korea Exchange’s trading curbs, which can suspend trading during sharp price moves. The report said exchanges currently operate with weaker internal controls and face lighter regulation than traditional financial firms.
Bithumb’s error occurred in early February when an internal transfer used bitcoin as the denomination rather than won. Prices on Bithumb fell as users rushed to sell the incorrectly credited bitcoin. The exchange halted trading and reversed the transfers within minutes, but 1,788 BTC — roughly $125 million then — had been sold before the reversal. Bithumb covered the resulting shortfall from corporate reserves.
The Bank of Korea recommended automated checks that detect “erroneous payments caused by human error” and systems that automatically reconcile a platform’s internal ledgers with on‑chain records. The central bank said automated verification would flag discrepancies between what an exchange reports it holds and what is visible on the blockchain, allowing faster intervention when balances diverge.
Data in the report showed a clear price gap between bitcoin on Bithumb and other Korean exchanges in the minutes after the transfers, illustrating how an exchange-specific operational error can create localized volatility and prompt broader selling pressure.
Lawmakers are advancing proposals to tighten oversight of the crypto sector. The central bank urged that any new legislation include requirements for trading curbs and error-prevention systems “to enhance the safety and transparency of virtual asset exchange operations,” the report added.
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