The Bank of Korea has proposed that regulators consider introducing a circuit breaker system for cryptocurrency exchanges, calling for stronger oversight following the recent Bitcoin mispayment incident at Bithumb.
"The virtual asset industry has weaker internal control mechanisms and faces less stringent regulations compared to established financial institutions," the central bank said in its 2025 Payment and Settlement Report released Tuesday.
In February, cryptocurrency exchange Bithumb mistakenly transferred 620,000 Bitcoin—worth approximately 60 trillion won ($44 billion)—to customers instead of the intended 620,000 won worth of Bitcoin due to an employee error during an event prize distribution.
Some customers who received the erroneous payment sold large quantities of Bitcoin, causing the price on Bithumb to plunge temporarily from 98 million won to 81 million won. Other users suffered losses from panic selling and automated sell orders. Bithumb suspended cryptocurrency trading and withdrawals approximately 40 minutes after the incident and forcibly recovered and deleted the mispaid Bitcoin, but 1,788 coins (0.3%) had already been sold and could not be recovered.
The BOK pointed out that the accident stemmed from the absence of internal control mechanisms to prevent operational risks. At the time, Bithumb allowed staff to transfer Bitcoin without approval from supervisors or verification from internal monitoring departments. The exchange also only reconciled its internal ledger with actual blockchain wallet balances once daily, creating a structural vulnerability.
"The 40 minutes it took from incident detection to exchange response, combined with the absence of mechanisms to address sudden market price swings from abnormal trading, were factors that amplified the incident," the central bank explained.
The BOK emphasized that similar accidents could occur at other cryptocurrency exchanges, underscoring the need for strengthened internal controls and institutional improvements. The central bank called for dual verification systems that can detect and control errors before cryptocurrency transfers are completed, as well as systems that can automatically verify in real time the consistency between exchange internal ledgers and blockchain-based virtual asset balances.
The central bank also suggested introducing mechanisms similar to the Korea Exchange's circuit breaker system. A circuit breaker temporarily halts trading when stock markets experience sharp rises or falls.
"There is a need to consider introducing systematic mechanisms that can suspend trading when sudden fluctuations occur in virtual asset prices," the BOK stressed.