South Korea to Mandate 5-Minute Asset Reconciliation for Crypto Exchanges by End-May

South Korea's Financial Services Commission (FSC) will require all domestic cryptocurrency exchanges to match their internal ledgers against actual asset holdings every five minutes, with full implementation due by the end of May, Yonhap News reported. The FSC said three of the country's five major exchanges still reconcile assets once every 24 hours, while the remaining two do so every five to 10 minutes. Regulators also flagged shortcomings in exchanges' trading-halt systems, or "circuit breakers," when large-scale asset mismatches occur. Under the new rules, exchanges must disclose daily reconciliation balances and submit to monthly external audits by accounting firms. The requirements will be folded into a broader legislative package aimed at the virtual-asset market, now being finalized by the government and the ruling Democratic Party. The tougher stance follows a February operational error at Bithumb, which mistakenly distributed 620,000 bitcoins (BTC) to 249 users in a promotional campaign, triggering a brief dip in Bitcoin's price. Bithumb froze trading and withdrawals for the affected accounts and has since recovered most of the mis-sent BTC, but the incident highlighted material weaknesses in its internal controls.