The Bank of Korea has used Bithumb’s February operational failure as a case study in crypto market risk, calling for circuit breakers and automated monitoring systems at digital asset exchanges. The central bank’s latest Payment and Settlement report argues that the incident exposed weak safeguards, slow response procedures, and a lack of controls that could stop an error before it spread through the market.
Bithumb campaign error sent rewards in BTC instead of won
According to the report, the problem began during a promotional campaign when a staff member entered the wrong unit. Instead of distributing rewards in Korean won, the system processed them in Bitcoin, leading to the mistaken release of 620,000 BTC. The exchange’s BTC/KRW pair fell about 15% in a short period, disrupting normal trading and leaving users with losses. The report said Bithumb took nearly 20 minutes to detect the error, giving the wrongly issued funds time to circulate across the platform.
Controls failed to block abnormal transfers and sales
The Bank of Korea said the incident grew worse because internal systems did not stop abnormal transfers or prevent users from selling the mistakenly distributed assets. That gap, in the central bank’s view, showed how far crypto trading venues still lag traditional financial markets in risk controls. The issue was not limited to a human mistake. It also involved the absence of automated defenses that could have flagged the transaction pattern immediately and contained the damage.
Central bank wants halts for volatility and large abnormal orders
The report backs the introduction of exchange-wide circuit breakers that would pause trading during extreme volatility or block unusually large orders before execution. It also stresses the need for automated surveillance tools that can identify human error in real time and stop faulty transactions before they reach user accounts. Regulators are urging lawmakers to include these requirements in the planned Digital Asset Basic Act, linking the Bithumb case to a broader legislative push.
IPO timeline slips as scrutiny deepens
The fallout is still affecting Bithumb. The exchange has asked a court to freeze 7 BTC that remain unrecovered, while authorities have stepped up their review of the company’s internal controls and compliance standards. The incident has also delayed Bithumb’s public listing plans, with its IPO timeline now pushed back to 2028. The Bank of Korea’s recommendations point to tighter oversight of South Korea’s crypto market, with more emphasis on pre-trade controls and faster intervention when exchange errors occur.