The Bank of Korea is pushing to install stock market-like circuit breakers on the country’s cryptocurrency exchanges, a proposal that would subject cryptocurrencies to the same trading suspension rules used by the Korea Stock Exchange.
The recommendation appears in the central bank’s Annual Report on Payment and Settlement Systems, published on April 13, and calls for automatic halts when cryptocurrency prices swing sharply or abnormal orders occur. The central bank said the rules should be incorporated into the pending Basic Law on Digital Assets.
The catalyst for the policy suggestion comes from an incident at Bithumb in February when an employee running a promotion entered the reward unit as “BTC” instead of “KRW,” distributing approximately 60 trillion won ($43 billion) worth of ghost bitcoins before supervisors caught the error 20 minutes later. Panic selling caused BTC on Bithumb to suffer a 17% drop, while the token continued to trade at market prices elsewhere.
Upbit, Bithumb, and Korea’s other three licensed exchanges already run high-speed comparison engines with built-in price collars and fat finger checks. CME Group runs a similar system on bitcoin futures, pausing trading for two minutes when prices move 10% within a 60-minute window.
The harder question is whether stops would work, given the global nature of BTC trading. If Upbit were to pause for 20 minutes, bitcoin would still be trading on Binance, Coinbase, and dozens of others, and Upbit’s price would adjust to wherever global markets move when they reopen.
Circuit breakers are a familiar tool in traditional finance, a visible sign that markets are under control. But cryptocurrencies don’t have a single place to stop, and the problems regulators are trying to solve don’t map neatly to price volatility.
