South Korean financial regulators have unveiled stringent new rules for cryptocurrency exchanges following a major payout error. The Financial Services Commission (FSC) will require platforms to perform real-time balance checks every five minutes and implement automatic transaction shutdowns for discrepancies. Exchanges must also strengthen internal controls by appointing risk officers, conducting monthly external audits, and automating high-risk processes to minimize human error and restore market trust.
South Korea’s Financial Services Commission (FSC) has introduced a new oversight system after a major payout error exposed systemic weaknesses. The regulator met with leading virtual asset exchanges to address recent failures and restore trust in the market.
The discussions followed an investigation triggered by a payout incident involving Bithumb. Authorities reviewed how exchanges manage user funds, their system vulnerabilities, and internal control strength.
Investigations found several exchanges were not monitoring balances between internal records and actual wallet holdings in real time. Regulators now require these balances to be checked every five minutes with an automatic shutdown system for large discrepancies.
The FSC also raised concerns over high-risk transactions like reward payouts that depend on manual input. Exchanges will be required to introduce automated checks, separate high-risk accounts, and enforce stricter multi-level approval processes.
Another major issue was weak internal control systems across the industry. Regulators plan to introduce standardized control programs and increase inspection frequency from once a year to every six months.
All crypto exchanges operating in South Korea must adopt a more structured approach by appointing risk officers and establishing a dedicated risk management committee. External audits will be conducted monthly instead of quarterly, with more detailed public disclosures about asset holdings.
The FSC and industry bodies aim to finalize these new rules within April and implement system upgrades by May. These measures are expected to be included in a broader digital asset law currently under review.
Authorities confirmed that Bithumb‘s internal control failures will likely lead to sanctions after legal reviews are completed. This signals a tougher regulatory stance on crypto exchanges moving forward.
