Toss Bank's "half-price yen exchange" incident, which drew 40,000 customers within just seven minutes, was largely driven by an automated trading service that executes purchases when target exchange rates are reached, according to financial authorities.
The Financial Supervisory Service (FSS) has determined that most transactions during the yen exchange rate system error at Toss Bank on the 10th of this month were executed through the automated exchange service.
The system error occurred between 7:29 p.m. and 7:36 p.m. on the 10th, applying an exchange rate of 472 won per 100 yen. The normal rate at the time was around 934 won per 100 yen, meaning yen was traded at roughly half the actual rate. The total value of yen exchanged at the erroneous rate reached 28.4 billion won, with approximately 40,000 customers completing transactions.
Toss Bank's automated trading structure enabled such a massive number of users to rush into exchanges within just seven minutes. Beyond immediate manual trading, the bank's foreign currency service offers automated functions that execute trades when preset conditions are met. These include "Exchange at Your Desired Rate," which executes trades when user-specified target rates are reached within a set period, and "Foreign Currency Savings," which makes regular purchases on designated days.
The key driver of the transaction surge was the "Exchange at Your Desired Rate" feature. This system automatically executes exchanges when the bank's posted rate falls below a user's preset threshold. While each currency can only be traded once per day through this feature, multiple transactions can occur simultaneously when conditions are met at the same time.
"Most transactions during the incident appear to have been executed through the automated exchange function," an FSS official explained.
Some transactions may have come from the "Auto Exchange for Insufficient Funds" feature, which automatically converts won to foreign currency when overseas payments exceed available foreign currency balances, though this portion appears to be small. The "Foreign Currency Savings" feature, which only executes trades at a fixed time (10 a.m.), is not considered directly related to this incident.
Exchange rate alerts also contributed to the surge. Notifications informing some users of "the lowest rate in three months" prompted customers who recognized the sharp drop to manually execute exchanges. The convergence of automated and manual trading concentrated transactions within a short window.
The incident has raised calls for a comprehensive review of automated exchange services. While such services have been praised for their convenience, allowing users to execute trades at desired rates without constantly monitoring exchange rates, the incident demonstrated that system errors can cause trades to pile up in one direction, amplifying losses.
"Some commercial banks have safeguards that set allowable ranges for exchange rate fluctuations by currency and block automated postings when rates exceed those bounds," a financial industry official said. "Internet banks that emphasize convenience as their competitive advantage will inevitably face greater pressure to consider such controls."
The FSS does not view the automated exchange function itself as problematic but plans to examine the related structure. "There are inherent trade-offs between convenience and security in automated exchange services," an FSS official said. "While we don't see the service itself as flawed, we will review these aspects as well."
