Bank of Korea urges crypto circuit breakers after Bithumb BTC error

The Bank of Korea (BOK) urged crypto exchanges to adopt “crypto circuit breakers” after an internal control failure at Bithumb exposed weaknesses that can trigger abrupt market breakdowns. In its April 13 annual payment and settlement report, the BOK said crypto-sector controls and compliance are below traditional financial standards. The trigger was a February incident: Bithumb intended to distribute about 620,000 won (≈$419) in rewards, but mistakenly sent 620,000 BTC. The transfer bypassed approvals and monitoring, with no supervisory verification or automated threshold limits. After recipients liquidated quickly, the event amplified a flash crash and cascading liquidations. Stop-loss orders worsened the drawdown, delayed detection allowed “ghost coins” to trade for about 35 minutes, and the fraud-detection system failed to trigger. To prevent repeats, the BOK recommended crypto circuit breakers that pause trading during extreme price moves or abnormal order volumes. It also called for real-time ledger verification to ensure internal balances match on-chain holdings, and multilayer supervisory approval and system-enforced caps for high-value transfers. For BTC traders, the key takeaway is that exchange operational risk—and upcoming compliance upgrades tied to “crypto circuit breakers”—can affect intraday volatility even if longer-term fundamentals remain unchanged.