Korea pushes crypto circuit breakers after $40B error

The Bank of Korea has called for crypto exchanges to introduce circuit breakers after a major trading disruption caused by a Bithumb error.

The central bank said trading curbs similar to those used on traditional exchanges should be implemented to halt activity during extreme price swings or operational failures.

“Currently, the virtual asset industry lacks internal control mechanisms and faces lower regulatory intensity compared to established financial institutions,”

The bank said.

The proposal follows an incident in which Bithumb mistakenly sent 620,000 Bitcoin, worth around $42 billion, instead of a small fiat amount.

The error triggered panic selling, with 1,788 BTC sold before trading was halted, forcing the exchange to cover losses from its own reserves.

The Bank of Korea also recommended systems to detect erroneous payments and reconcile internal balances with blockchain data to prevent similar failures.

The proposal comes as lawmakers consider broader crypto regulation aimed at improving market safety and transparency.

At the time of reporting, Bitcoin price was $70,714.32.