The Bank of Korea (BOK) has urged the cryptocurrency industry to adopt stronger safeguards after a major operational failure at crypto exchange Bithumb earlier this year.
In comments made on Monday, South Korea’s central bank suggested that crypto exchanges should use new mechanisms designed to prevent mistakes like the one that led to an erroneous payment involving 620,000 Bitcoin (BTC) in February.
Bithumb Case Details
Local media reports say the BOK pointed to the absence of circuit-breaker style systems as a key reason such incidents can escalate. The central bank highlighted that the crypto asset sector, compared with traditional finance, generally has “weaker internal controls and lower regulatory standards.”
The Bithumb incident itself, according to the Bank of Korea’s description at the time, involved staff distributing Bitcoin without the required approvals. The exchange allegedly allowed employees to send BTC without supervisor clearance and without verification through internal monitoring departments.
The BOK also noted that the damage was made worse by delays in recognizing what had happened and responding appropriately. It said Bithumb’s fraud detection system did not function as expected, which contributed to the scale and impact of the mistake.
BOK Calls For Real-Time IT Checks
Looking ahead, the Bank of Korea said it believes crypto exchanges should consider system-level protections similar to the Korea Exchange (KRX) circuit breakers.
The idea is to give markets an automatic “pause” mechanism during abnormal activity—such as large-volume orders or sudden, sharp price swings—so trading can be halted when conditions indicate something is going wrong.
Beyond trading halts, the BOK also stressed the need for better technology to reduce human error. It said exchanges should have IT systems that can automatically, and in real time, verify that internal ledgers match blockchain balances, and stop erroneous payments before they propagate.
In other words, the Bank of Korea is pushing for real-time checks that can confirm balances accurately and prevent mistakes from turning into costly incidents.
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