South Korea orders crypto exchanges to reconcile balances every five minutes after Bithumb's $56B bitcoin crediting error

South Korea's Financial Services Commission has ordered all cryptocurrency exchanges to implement always-on balance reconciliation systems that run on five-minute cycles, following an emergency inspection sparked by a major operational error at Bithumb. In February, Bithumb mistakenly credited 620,000 BTC—instead of 620,000 won—to 249 users. Regulators said the review found many exchanges were reconciling holdings only once every 24 hours, with weak internal controls and limited automated safeguards for high-risk transactions. Under the new requirements, exchanges must deploy automatic "kill switches" when large discrepancies are detected, increase the frequency of external audits to monthly from quarterly, and segregate accounts used for high-risk operations. The Digital Asset Exchange Alliance (DAXA) is required to finalize self-regulatory standards this month and have related IT systems in operation by May. The Financial Supervisory Service is also considering sanctions against Bithumb under the Virtual Asset User Protection Act. South Korea has about 11 million crypto users holding roughly $48 billion in digital assets.