South Korea Crypto Regulation Crackdown Urged After Bithumb Bitcoin Error

South Korea crypto regulation crackdown calls intensified after the financial watchdog said Bithumb’s accidental distribution of more than USD40bn worth of bitcoin to customers showed the need for tougher rules to address vulnerabilities in trading systems.

Financial Supervisory Service Governor Lee Chan-jin said regulators will factor in lessons from the incident as they pursue legislation to bring digital assets under tighter oversight, and flagged concerns including so-called ghost coins, or virtual assets traded without being properly backed.

Bithumb said the error, which sparked a sell-off, was unintentional, and authorities said 99.7% of the 620,000 bitcoins were retrieved, including 93% of the 1,786 already sold before transactions were suspended.