The Bank of Korea is urging South Korea’s crypto platforms to adopt stock-market-style circuit breakers, proposing automatic trade halts when prices swing wildly or abnormal orders flood the books. The recommendation appears in the central bank’s annual Payment and Settlement Systems Report, published April 13, and calls for these mechanisms to be written into the pending Digital Asset Basic Act.
The proposal was prompted by a high-profile Bithumb mishap in February, when an employee running a promotion accidentally entered the reward unit as “BTC” instead of “KRW.” That mistake briefly created roughly 60 trillion won (about $43 billion) in phantom bitcoin before supervisors intervened 20 minutes later. The erroneous orders triggered panic selling on Bithumb that pushed BTC down about 17% on that venue, even as bitcoin continued trading at market prices on other exchanges.
Some domestic players already use protective measures. Upbit, Bithumb and three other licensed Korean exchanges operate high-speed matching engines with price collars and fat-finger checks. There are precedents in traditional markets, too: CME Group runs a similar system for bitcoin futures that pauses trading for two minutes when prices move 10% within a 60-minute window.
But implementing circuit breakers in crypto raises thorny questions. Bitcoin trades continuously across dozens of global venues, so halting one exchange won’t stop price discovery elsewhere — if a Korean exchange pauses for 20 minutes, the global price can move and that exchange’s order book will likely realign to the wider market on reopening. That reality complicates the central bank’s goal of using halts to curb volatility: circuit breakers are a familiar, visible tool in equities markets, but crypto lacks a single, stoppable venue and the problems regulators aim to fix don’t always map cleanly to pure price swings.
The Bank of Korea’s recommendation frames circuit breakers as part of broader efforts to strengthen market integrity and operational resilience as South Korea prepares to codify crypto rules under the Digital Asset Basic Act. Whether such measures will be effective in a fractured, 24/7 global market remains the central debate.
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