Bank of Korea Urges Crypto Circuit Breakers Following Bithumb Operational Failure

The Bank of Korea (BoK) has recommended that South Korean lawmakers implement "circuit breakers" for cryptocurrency exchanges to mitigate the risk of extreme price fluctuations caused by operational errors. The central bank argues that such mechanisms, similar to those used by the Korea Exchange, are necessary to maintain market stability. The proposal stems from a February incident involving Bithumb, where a clerical error led to the accidental distribution of 620,000 Bitcoin—valued at approximately $42 billion at the time—instead of 620,000 Korean won. The BoK report highlights that this error triggered a wave of panic selling on the Bithumb platform as users rushed to liquidate the unexpected assets. Although Bithumb halted trading and reversed the transactions within minutes, the exchange reported that 1,788 BTC, worth roughly $125 million, were sold before the correction could be implemented. Bithumb utilized company reserves to cover the resulting shortfall. The central bank noted that the virtual asset industry currently lacks the internal control mechanisms and regulatory intensity found in traditional financial institutions. To address this, the BoK suggests that exchanges be required to implement systems capable of detecting human error and automated verification tools to reconcile internal platform assets with blockchain data. These measures are being considered as part of a broader legislative effort to enhance the safety and transparency of virtual asset operations in South Korea, one of the world's most active cryptocurrency markets.