South Korea enforces five-minute asset balance checks after Bithumb overpayment

South Korea’s Financial Services Commission (FSC) has introduced new rules requiring crypto exchanges to perform five-minute asset balance checks. The change follows a major February payout error at Bithumb, where users were mistakenly credited with 2,000 Bitcoin instead of 2,000 Korean won—an incident valued at about $42 billion at the time. Under the new compliance package announced April 6, exchanges must use automated systems to verify user balances every five minutes. If balances exceed a set mismatch threshold, trading must halt automatically and alerts are triggered for review. The FSC also found gaps during emergency inspections of the five largest exchanges, including reconciliation only on a daily basis, missing automatic trading halts for account mismatches, and weaknesses in controls for high-risk and manual transactions. Beyond five-minute asset balance checks, the rules tighten audit and reporting: external reserve audits will move from every three months to monthly, and exchanges must disclose blockchain-based holdings token by token rather than only consolidated ratios. High-risk operations (e.g., reward payments) must be routed through separate accounts with stricter governance, independent third-party verification, and validity checks to prevent input errors. Exchanges will also appoint a risk management officer and establish a risk committee, aligning crypto oversight with traditional finance. Industry body DAXA is set to finalize upgraded self-regulatory standards by May.