Bithumb error exposed weak controls, pushing regulators to consider circuit breakers to limit crypto market risks. South Korea’s central bank is calling for stricter safeguards in the crypto market after a major exchange error shook confidence. A recent report points to structural gaps between digital asset platforms and traditional financial systems. Authorities now want mechanisms that can limit damage during extreme events. Focus has turned to preventing human errors from triggering market-wide disruptions. Trading Chaos After Bithumb Error Renews Focus on Market Safeguards Bank of Korea has urged the introduction of circuit breakers in cryptocurrency trading following a costly incident involving Bithumb. In its latest Payment and Settlement report released Monday, the central bank argued that crypto markets lack critical safeguards seen in traditional finance. Concerns stem from a February 6 error in which Bithumb mistakenly transferred 620,000 BTC during a promotional event. Staff reportedly entered rewards in bitcoin instead of Korean won. At the time, the amount was valued at roughly $43 billion. In the aftermath of the event, chaos followed almost immediately. Bitcoin’s KRW trading pair on the platform fell around 15%, resulting in losses for users. Market instability worsened as recipients moved or sold the funds mistakenly distributed to them. Internal response delays also drew criticism, with many pointing to Bithumb’s 20-minute delay in detecting the issue. During that window, no system blocked transactions or restricted abnormal activity. According to the Bank of Korea, such gaps expose users to avoidable risks. Exchange Error Exposes Gaps as South Korea Eyes Trading Halts Regulators now want exchanges to adopt automated controls that detect unusual transfers instantly. Proposed safeguards include systems that halt trading during sharp price swings or block large, irregular orders. Similar mechanisms already exist in stock markets to prevent flash crashes. Lawmakers are expected to review these measures under the upcoming Digital Asset Basic Act. The legislation aims to define clearer rules for South Korea’s crypto sector and strengthen oversight. In the meantime, Bithumb continues to deal with the fallout. The exchange recently sought a court order to freeze 7 BTC that remains unrecovered. Investigations and regulatory scrutiny have intensified since the incident. Plans for its initial public offering have also been pushed back to 2028. Pressure is building on exchanges to improve internal controls. Authorities see the Bithumb case as a warning sign for the broader market. Without stronger safeguards, similar incidents could trigger larger disruptions in the future. The post Bank of Korea Pushes Crypto Circuit Breakers After Bithumb Error Sparks Market Shock appeared first on Live Bitcoin News.

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