The Bank of Korea wants crypto exchanges to add circuit breakers after Bithumb mistakenly sent 620,000 BTC instead of 620,000 won. The error triggered heavy selling, and the central bank now wants stronger safeguards and tighter exchange controls.
South Korea’s central bank is calling for tighter controls on crypto exchanges after a major Bitcoin transfer error at Bithumb shook the local market. In a payments report released on Monday, the Bank of Korea said lawmakers should consider rules that require exchanges to pause trading during sudden price moves. The proposal follows a February mistake in which Bithumb sent customers 620,000 Bitcoin instead of 620,000 Korean won during a promotional event.
Bank of Korea calls for exchange trading curbs
The Bank of Korea said crypto exchanges need their own version of “circuit breakers” to stop trading during sharp price swings. It said the virtual asset sector still operates with weaker internal controls than traditional financial institutions.
The central bank wrote that “currently, the virtual asset industry lacks internal control mechanisms and faces lower regulatory intensity compared to established financial institutions.” It added that “as similar incidents could occur at other virtual asset exchanges, it is necessary to strengthen relevant regulations to prevent them in advance.”
The report said lawmakers should consider including such safeguards in future crypto legislation. It also said stronger rules could “enhance the safety and transparency of virtual asset exchange operations.” South Korean lawmakers are already reviewing new measures for the digital asset sector.
Bithumb error triggered heavy selling
The push for tighter rules follows an error at Bithumb in early February. During a customer event, the exchange meant to send prizes worth about 620,000 Korean won, or roughly $400. Instead, it sent 620,000 Bitcoin, worth about $42 billion at the time.
After the mistaken transfers, users rushed to sell the Bitcoin they had received. According to the Bank of Korea’s report, the selling caused Bitcoin’s price on Bithumb to fall quickly. That move also triggered panic selling from other users on the platform.
Bithumb halted trading within minutes and reversed the mistaken transfers. Even so, the exchange said 1,788 BTC had already been sold before it could fully stop the activity. At the time, that amount was worth about $125 million. Bithumb later covered the shortfall with its own reserves.
A chart included in the report showed Bitcoin on Bithumb falling below the price seen on rival exchange Upbit during the incident. The gap pointed to how a single operational error can disrupt pricing on one platform in a short period.
Central bank seeks stronger internal controls
The Bank of Korea said exchanges should be required to build systems that detect and block “erroneous payments caused by human error.” It also said exchanges should have tools that automatically compare internal asset records with blockchain balances to spot mismatches.
According to the report, the Bithumb case showed that internal review and monitoring systems were not strong enough. The central bank said crypto platforms need controls that can respond faster when large or unusual transactions occur.
The proposal comes as South Korea continues to tighten its oversight of digital assets. Regulators have already moved to strengthen rules in other areas, including crypto withdrawals and anti-money laundering controls. Bank of Korea officials now want exchange safety rules to become part of that broader effort.
