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Ahmed Balaha
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This $44 billion Bithumb “Oops” just changed everything for crypto in South Korea.
On Monday, regulators confirmed a major crackdown after the Bithumb exchange accidentally sent 620,000 Bitcoin, roughly $44 billion, in a single transaction.
That chaos exposed how fast whales move when platforms break. Now the Financial Supervisory Service is pushing its 2026 plan, with a sharp focus on hunting big players who exploit exchange failures.
Regulators Target ‘Gating’ and Infrastructure Failures
Bithumb API promo glitch sent 620,000 BTC to 249 users. Recovery started as soon as possible, but the mess exposed real cracks in South Korea crypto infrastructure.
Local reports say the Financial Supervisory Service is now probing gating, when exchanges halt deposits or withdrawals to trap supply and distort prices.
FSS governor Lee Chang-jin said the agency will aggressively target schemes exploiting these breakdowns, including fishbowl tactics that manipulate prices inside frozen exchanges.
AI Surveillance and New Trading Restrictions
The Financial Supervisory Service says it is rolling out automated systems to track weird price moves down to the millisecond.
As of February 2, it expanded AI powered surveillance to cut manual monitoring and move faster. These tools are built to flag racehorse trading, where traders pile in fast to spark price spikes, plus coordinated moves fueled by social media misinformation.
Under the upcoming Digital Asset Basic Act, the FSS plans to hit IT failures hard, with heavy fines and direct accountability for CEOs and CISOs.
On top of that, the Fair Trade Commission already raided Bithumb’s Seoul office over misleading liquidity ads, signaling a full multi agency crackdown on an exchange that handles 28% of the country trading volume.
Global Availability Amid IPO Ambitions
The timing of these probes complicates Bithumb’s strategic goals, specifically its target for a New York Stock Exchange IPO within the year. The investigations arrive as broader Asian markets tighten controls, evident as China bans unapproved Yuan-pegged stablecoins to protect currency stability.
South Korea’s strict enforcement could force exchanges to overhaul their API offerings and internal controls to remain compliant.
With Upbit dominating 68% of the local market, Bithumb’s regulatory hurdles may widened the gap between the two rivals.
The FSS is expected to activate the financial sector’s integrated monitoring system (FIRST) later this month to further standardize cyber threat sharing and compliance reporting.
https://cryptonews.com/news/south-korea-expands-crypto-probes-bithumb-error/
