South Korea’s central bank is urging local cryptocurrency exchanges to adopt stock market style circuit breakers, driving a push for new South Korea crypto regulation.
The Bank of Korea outlined the proposal in its 2025 Payment and Settlement Report.
The central bank cited an operational failure at Bithumb in February as evidence that the digital asset market requires traditional financial safeguards, as reported by The Block.
Fat finger error triggers market plunge
The regulatory push stems from a February 6 incident where a Bithumb employee mistakenly transferred 620,000 Bitcoin instead of South Korean won during a promotional event.
The input error incorrectly credited users with approximately US$43 billion in digital assets.
The resulting panic selling and forced loan liquidations caused the Bitcoin to won trading pair on the platform to drop by more than 17%.
The central bank highlighted that Bithumb took 20 minutes to detect the mistake and another 20 minutes to mount a full response.
“The primary cause was the lack of internal control systems designed to prevent such operational risks,”
the Bank of Korea stated in its report.
The central bank noted that the digital asset sector maintains much lower regulatory standards than traditional financial institutions.
South Korea crypto regulation aligns with traditional finance
To prevent similar market shocks, the central bank recommended installing automated mechanisms to halt trading for 20 minutes during abnormal price swings or bulk orders.
The Financial Services Commission has already mandated that exchanges implement real time systems to verify internal ledgers against blockchain balances by May 2026.
These proposed safeguards reflect a broader shift in South Korea crypto regulation, bringing digital asset trading oversight in line with traditional financial markets.
This mirrors developments in Hong Kong, where the Securities and Futures Commission enforces stringent operational controls for its licensed virtual asset trading platforms.
The impending Digital Asset Basic Act will likely formalise this new era of South Korea crypto regulation by codifying these circuit breaker mechanisms into law.
Multiple probes target Bithumb
Bithumb is facing mounting external scrutiny alongside the central bank’s critique.
Authorities summoned two Bithumb executives for questioning as witnesses, according to the Seoul Economic Daily.
No charges have been filed against the lawmaker or the executives at the time of publication.
Featured image credit: Edited by Fintech News Hong Kong, based on image by pvproductions via Freepik
