The South Korea Financial Services Commission convened five major domestic virtual asset exchange service providers and the Digital Asset Exchange Alliance to present inspection findings following Bithumb’s erroneous payout incident and to set out improvement measures. The exchanges and DAXA also adopted a joint resolution to strengthen the industry’s self-regulatory framework and internal controls to prevent future payment accidents. Inspections found weaknesses in (i) ledger-to-wallet balance reconciliation, (ii) controls over high-risk, manually entered transactions such as reward payouts, and (iii) broader internal control and emergency response arrangements. The measures will require near real-time reconciliation every five minutes, introduce criteria for automated transaction “kill switches” when large mismatches arise, increase external accounting firm verification from quarterly to monthly, and expand disclosures to include virtual asset quantities by type per wallet and per ledger. Exchanges will also have to segregate high-risk transaction accounts, implement automated validity checks to block payments that deviate from planned units and quantities, add third-party cross-checks at input, and apply tiered authorization and multi-approval processes based on payment size. To address internal control gaps, a standardized internal control compliance program will be introduced, inspections will move from annual to semi-annual with results reported to the financial authority, and exchanges will jointly develop standardized risk criteria and governance arrangements such as appointing risk officers and operating risk committees. Financial authorities and DAXA aim to complete rule changes within April and deliver system upgrades for real-time reconciliation by May, with key details to be incorporated into the pending framework law on digital assets. Separately, the Financial Supervisory Service has identified internal control deficiencies at Bithumb from an inspection conducted between February 10 and March 6 and plans to begin sanctions procedures after completing its legal review.
South Korea Financial Services Commission 2026-04-06
South Korea Financial Services Commission requires real-time ledger-to-wallet reconciliation and tighter controls at virtual asset exchanges after Bithumb payout error
The South Korea Financial Services Commission met with five major virtual asset exchanges and the Digital Asset Exchange Alliance to present inspection findings after Bithumb’s erroneous payout and to agree on stronger self-regulation and internal controls. Measures include near real-time ledger-to-wallet reconciliation, tighter controls and segregation for high-risk manual transactions, more frequent external verification, expanded disclosures, standardized internal control programs, semi-annual inspections and common risk governance standards. Separately, the Financial Supervisory Service found internal control deficiencies at Bithumb and plans sanctions procedures after legal review.