South Korea Tightens Crypto Oversight With 5-Minute Reconciliation Requirement
Bithumb has pushed its stock market debut back beyond 2028, saying it needs to revamp accounting systems and internal controls after a high-profile payout mishap drew regulatory attention.
The Financial Services Commission (FSC) said Monday that all crypto exchanges operating in South Korea must reconcile internal ledgers with actual asset holdings every five minutes. The order follows an emergency inspection sparked by Bithumb's February incident, when the exchange mistakenly distributed 620,000 Bitcoin to 249 users during a rewards promotion. Bithumb said it recovered 99.7% the same day and covered the remaining 1,788 BTC—already sold—using company funds.
Regulators said the broader review revealed significant weaknesses across the sector. Three of the country's five largest exchanges were reconciling balances only once every 24 hours, and safeguards intended to halt trading when large discrepancies emerged were deemed insufficient.
Under the new framework, exchanges must implement automated systems that match ledger entries to wallet balances on a five-minute cycle and set clear thresholds that trigger automatic trading suspensions when irregularities appear. High-risk activities, including promotional payouts, will require third-party review and multi-level internal approval. Exchanges must also segregate high-risk accounts and adopt mandatory automated payment verification tools.
Audit requirements are also being overhauled. Quarterly reviews will be replaced by monthly audits, and exchanges will be required to publish detailed asset balance breakdowns by both wallet and ledger. The FSC said it and the Digital Asset Exchange Alliance aim to finalize the updated rules by the end of April.
Bithumb's IPO timeline has slipped at least three years from its original 2025 target. The exchange has engaged Samjong KPMG as an adviser and said it will devote 2027 to strengthening financial policies and internal controls before pursuing a listing again.
Separately, Naver Financial has postponed its planned share swap with crypto firm Dunamu by about three months. A shareholder vote is now scheduled for Aug. 18, and the transaction is expected to close by Sept. 30.
South Korea, already among the most active crypto regulators globally, is signaling a tougher stance—leaving exchanges less room for operational error.
