Bank of Korea Recommends Circuit Breakers for Crypto Exchanges
- The Bank of Korea (BOK) urged crypto exchanges to implement circuit breakers to manage extreme volatility.
- A major operational failure at Bithumb led to the erroneous issuance of Bitcoin worth approximately $60 trillion won.
- The incident exposed significant control weaknesses, with no supervisory verification or automated limits in place.
- BOK suggests real-time ledger verification systems to prevent payment errors and ensure internal balances match blockchain holdings.
- Mandatory multilayer supervisory approval for high-value transactions is recommended to align with traditional finance standards.
The Bank of Korea’s recommendations come after a significant error at Bithumb, highlighting the need for improved internal controls in the crypto industry compared to traditional financial markets.
Implementing circuit breakers and real-time verification systems could mitigate risks associated with operational failures, ensuring more robust governance in digital asset trading platforms. (Source)
