The Financial Supervisory Service of South Korea is intensifying its oversight of the crypto market following Bithumb’s massive error. According to the watchdog this Monday, the platform mistakenly credited billions in Bitcoin to its users, an event that has put high alert to the South Korea regulators.
This unprecedented incident, which occurred when the exchange accidentally delivered 2,000 units of the leading cryptocurrency to various clients, caused immediate financial chaos. The error figure, estimated at approximately 44 billion dollars total, far exceeded the platform’s total reserves, highlighting severe operational failures within their internal distribution systems.
Strengthening surveillance and new technological control tools
On the other hand, the financial authority plans to implement advanced tools that allow them to extract suspicious trading patterns by the second, ensuring much stricter supervision. Thus, the agency seeks to eradicate large-scale price manipulation by whales, integrating text analysis systems based on artificial intelligence to detect potential market abuse.
Likewise, officials reported that the error caused the price of Bitcoin to drop thirty percent relative to the global average. Due to this situation, the platform restricted trading for six hundred ninety five affected customers within thirty minutes, attempting to contain a major disaster while beneficiaries tried to liquidate the assets received in an erroneous manner.
In addition to technological measures, the Financial Supervisory Service will introduce punitive fines for information technology incidents across the entire local financial sector. Therefore, security responsibility will fall directly on senior executives, who must legally respond to any vulnerability that puts at risk the funds and stability of investors globally.
How will these new regulations affect the confidence of Korean investors?
On the other hand, Bithumb has initiated a compensation program offering full restitution plus an additional ten percent to the harmed users. Nevertheless, the event exposed the inherent risks of virtual assets, leading authorities to indicate they will conduct on-site inspections if irregularities in the current internal control systems persist in the future.
However, the crackdown plan reflects a broader push by President Lee Jae-myung to eliminate financial practices considered to be cruel in the country. By establishing a preparatory team for the Basic Digital Asset Act, the government aims to expand the regulatory framework, ensuring that assets on the ledger are backed by actual and verifiable reserves.
It is also relevant to mention that attackers and manipulators often exploit these gaps to execute coordinated pump and dump schemes. Through the new legal infrastructure, the South Korea regulators hope to shield the ecosystem against social media misinformation, which usually aims to artificially inflate the value of dubious projects.
Finally, the future of local exchanges will depend on their ability to adapt to these demands for transparency and extreme computer security. It is expected that the implementation of these rules will restore confidence in the cryptocurrency sector, allowing for sustainable growth that protects retail users against catastrophic technical failures that compromise the wealth of thousands of people.
