Bank of Korea Proposes Circuit Breakers for Crypto Exchanges to Prevent Bithumb-like Incidents

Bank of Korea Proposes Circuit Breakers for Crypto After Bithumb Incident

South Korea's central bank is calling for circuit breakers in the crypto asset industry to prevent a repeat of incidents like the one at Bithumb, where the exchange mistakenly distributed tens of trillions of won worth of bitcoin. The Bank of Korea made the proposal in its annual payment settlement report.

The central bank analyzed that the root cause of the Bithumb incident was a lack of internal controls: employees could issue digital assets without supervisory approval, and internal ledgers were reconciled with blockchain wallet balances only once a day—a structural vulnerability.

The Bank of Korea recommends building a dual-confirmation system that enables real-time automated reconciliation between ledgers and on-chain balances, as well as developing IT systems that can block abnormal transactions. Separately, the central bank plans to officially launch an offshore won settlement system in 2027, using real-time gross settlement to reduce credit risk. The system will be built separately from the Bank of Korea's financial network to preserve the latter's functionality and stability.