What happened in the Bithumb Bitcoin incident?

Bithumb mistakenly sent 620,000 Bitcoin instead of 620,000 Korean won to users in February. This error briefly injected over $40 billion worth of Bitcoin into accounts, triggering panic selling before the exchange reversed the transactions.

Why is the Bank of Korea proposing crypto “circuit breakers”?

The Bank of Korea wants exchanges to halt trading during extreme price swings or system errors. This would prevent panic selling and limit market disruption from incidents like the Bithumb mistake.

What are circuit breakers in financial markets?

Circuit breakers are mechanisms that pause trading when prices move too quickly. They are commonly used in stock markets to prevent crashes and give traders time to react.

How did the Bithumb error impact Bitcoin prices?

The mistaken transfers caused users to sell quickly, triggering a price drop on Bithumb. This led to a cascade of panic selling before trading was halted.

How much Bitcoin was actually sold before Bithumb stopped the issue?

About 1,788 BTC, worth roughly $125 million, was sold before the exchange halted trading. Bithumb covered the losses using its own reserves.

What new rules is the Bank of Korea suggesting?

The central bank recommends systems to detect erroneous transactions, verify internal balances against blockchain data, and implement trading halts during abnormal activity.

Why does the Bank of Korea think crypto exchanges need stricter rules?

The bank says crypto platforms have weaker internal controls and lower regulatory oversight compared to traditional financial institutions. This increases the risk of operational errors and market instability.

How could this affect crypto exchanges in South Korea?

Exchanges may face stricter compliance requirements, including real-time monitoring systems and automated safeguards. This could increase costs but improve market stability.

Cryptocurrency

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Korea pushes crypto circuit breakers after $40B error

Written by Heidi Cuthbert Published Apr 13, 2026, 12:00 AMLast Updated May 7, 2026, 3:08 AM

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.