South Korean lawmakers are ramping up strain on monetary regulators after a system failure at Bithumb, the nation’s largest cryptocurrency trade, led to the unintentional distribution of greater than $43 billion price of Bitcoin (BTC) earlier this month.
The February 6 incident has triggered political scrutiny of each the trade itself and the companies chargeable for overseeing the digital asset market.
Behind The Bithumb Huge Bitcoin Mishap
In accordance to native reporting by The Korea Instances, members of the Nationwide Meeting are questioning how such an enormous error may slip by way of regardless of repeated regulatory inspections.
Rep. Kang Min-guk of the primary opposition Individuals Energy Occasion disclosed that the nation’s Monetary Companies Fee (FSC) reviewed Bithumb 3 times between 2022 and 2025.
Over the identical interval, the Monetary Supervisory Service (FSS) carried out three separate inspections. But regulators didn’t detect what has now been described as a important structural weak spot within the trade’s system.
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Kang argued that current oversight mechanisms have been insufficient. He identified that safeguards have been inadequate to forestall a scenario wherein a single worker may provoke large coin transfers. Kang mentioned:
The episode just isn’t merely a technical mishap however a case that lays naked deeper structural weaknesses within the digital asset market, together with complacent supervision and gaps in regulation.
As a substitute of crediting customers with Bitcoin price 2,000 received — roughly $1.38 — the system mistakenly credited 2,000 Bitcoin per consumer. In complete, 620,000 Bitcoin have been incorrectly distributed.
Rep. Han Chang-min of the minor Social Democratic Occasion additionally criticized regulators, questioning whether or not supervisory authorities had meaningfully evaluated the trade’s inside methods. “Authorities gave the impression to be shifting duty onto Bithumb regardless of their supervisory position,” Han mentioned.
Broader Crypto Oversight
In response to the incident, the FSS prolonged the deadline for its formal investigation from Feb. 13 to the top of the month, citing the necessity for added time.
An eight-member inspection workforce is now intensifying its overview, specializing in potential violations associated to investor safety and anti-money laundering (AML) compliance.
Specific consideration is being given to the system structure that allowed cash not truly held by the trade to be credited to customers. Regulators haven’t dominated out the likelihood that additional misguided distributions could possibly be uncovered.
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Individually, monetary authorities have reportedly fashioned an emergency response workforce in coordination with the Digital Asset eXchange Alliance (DAXA), a self-regulatory physique representing home exchanges.
The workforce has begun inspections of asset verification and inside management methods at 4 different platforms — Upbit, Coinone, Korbit, and GOPAX. Any deficiencies are anticipated to be included into DAXA’s self-regulatory tips and will affect the subsequent section of cryptocurrency laws in South Korea.
On the time of writing, Bitcoin was buying and selling at $67,763, marking a 2% decline over the previous seven days and exhibiting minimal change since Thursday’s buying and selling session.
Featured picture from OpenArt, chart from TradingView.com
