The Bank of Korea (BOK) on Monday released its annual Payments and Settlements Report, formally recommending that lawmakers introduce circuit-breaker mechanisms similar to those used in stock markets for crypto exchanges. The trigger: a massive input error at Bithumb in February where an employee mistakenly set the unit of promotional rewards as BTC instead of KRW, leading to the release of 620,000 BTC worth approximately $42 billion and a 17% single-day crash in Bitcoin price.
Bithumb's Typo: 695 Users Each Received 2,000 BTC
In February 2026, Bithumb ran a "random box" promotion meant to distribute BTC worth between 2,000 and 50,000 KRW to 695 participants. An employee inputting the reward amount typed "BTC" instead of "KRW". Each participant received 2,000 BTC — worth roughly 19 billion KRW ($140,000) each at the time. In total, Bithumb inadvertently disbursed 620,000 BTC, valued at $42 billion in minutes.
17% Flash Crash, Exchange Left to Cover Losses
Recipients quickly cashed out. The BTC price on Bithumb plunged 17%, triggering panic selling. The exchange halted trading and attempted to reverse the transactions, but 1,788 BTC ($125 million) had already been sold. Bithumb ultimately covered the shortfall with its own funds, straining its finances. The incident prompted an investigation by the Financial Supervisory Service (FSS), revealing systemic gaps in asset reconciliation and account segregation.
BOK Warns of Low Regulatory Intensity
"Currently, the virtual asset industry lacks internal control mechanisms and faces lower regulatory intensity compared to established financial institutions," the BOK report stated. It warned that similar incidents could occur at other exchanges. The central bank proposed two concrete measures: a system to detect and prevent human error in payments — flagging abnormal withdrawal orders before execution — and an automated reconciliation mechanism that compares on-chain asset balances against internal ledgers in real time, triggering circuit breakers for any major discrepancy.
FSC Mandates 5-Minute Auto-Reconciliation by May
The Financial Services Commission (FSC) had already acted after the Bithumb incident, ordering all centralized exchanges operating in Korea to deploy an automated five-minute reconciliation system by May 2026. Every five minutes, exchanges must match internal ledgers with hot and cold wallet balances; any significant gap triggers an automatic kill switch, blocking further fund movements. The BOK report seeks to elevate this administrative order into law, tying it to ongoing legislative efforts on stablecoins, real-world asset tokenization (RWA), and crypto-related foreign exchange rules.
For Korean exchanges, the implications are stark. Five-minute on-chain reconciliation is a demanding real-time requirement; if circuit breakers become law, any system anomaly could force an automatic halt, sharply reducing the technical margin for error. A chain reaction that began with a typist's finger is reshaping the rules of Korea's crypto market.