South Korea mulls tighter crypto exchange rules after Bithumb's $40B error

South Korea's ruling Democratic Party's Digital Asset Taskforce will consult advisory committee members ahead of a February 24 meeting as lawmakers move to tighten crypto exchange oversight following Bithumb's erroneous $40B Bitcoin giveaway, Joongang Ilbo reported. The package would be strict and modeled on traditional financial regulation, with the industry bracing for imminent restructuring and exchange rules likely bundled with stablecoin issuance measures, unnamed lawmakers and industry officials said. The Financial Supervisory Service favors liability rules for computer-related faults, larger reserve holdings to absorb costs from hacks or giveaway mistakes, and financial institution-level IT controls such as multisignature transfers and cooling-off periods that allow customers to cancel large transfers; it has also extended its formal investigation into Bithumb to the end of February, Joongang Ilbo said. Bithumb mistakenly issued Bitcoin to 249 lucky draw participants when an official selected Bitcoin instead of Korean won for a planned total of around $423, and while most of the Bitcoin has been recovered, the episode was ill-timed for local exchanges, coming weeks after a $36 million hack at Upbit and as Bithumb seeks a US listing this year, Joongang Ilbo reported.