South Korean lawmakers are pushing for closer scrutiny of the country’s cryptocurrency market following a technical error at Bithumb, one of the nation’s largest exchanges.

Earlier this month, Bithumb mistakenly credited users with Bitcoin it did not hold. The error briefly triggered a surge in sell orders. Officials said the incident revealed potential gaps in market oversight.

$43Billion Bithumb Mistake Prompts Rules

The Financial Services Commission has proposed limiting major shareholders’ stakes in domestic crypto exchanges. The measure is intended to strengthen governance under the forthcoming Digital Asset Basic Act.

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Bithumb said it miscredited each user with 2,000 BTC instead of 2,000 Korean won (about $1.40), totaling 620,000 BTC. Most of the miscredited assets were later recovered.

The exchange reported 125 BTC, worth roughly $8.6 million, remained unrecovered. Bithumb pledged to improve verification and monitoring systems. Industry reports estimated the total miscredit at about $43billion before most assets were corrected.

Lawmakers Criticize FSC Oversight Failures

Traditional financial firms are showing growing interest in the sector. Mirae Asset Financial Group is reportedly exploring a major stake in a local exchange, reflecting institutional positioning in South Korea’s crypto market.

Lawmakers criticized the FSC for prior oversight. Representative Kang Min-guk of the opposition People Power Party said the incident showed “broader structural issues in the local crypto market,” including gaps in regulation and oversight. The FSC had inspected Bithumb at least three times since 2022.

South Korea Faces Persistent Crypto Oversight Challenges

The FSC opened an investigation on February 10. Officials initially expected it to conclude within days, but it has been extended to the end of February. Authorities said they would take “stern legal actions against acts that harm the market order.” Bithumb CEO Lee Jae-won told lawmakers the exchange had previously experienced two smaller payout errors, which were corrected.

The incident raises further concerns over South Korea’s handling of digital assets. Previous cases, including missing Bitcoin from police and prosecutors’ offices, have prompted questions about custody and security. Analysts say persistent challenges remain in oversight and asset management in the country’s cryptocurrency sector.