The Bank of Korea is pushing to install stock market-style circuit breakers on the country’s cryptocurrency exchanges, a proposal that would bring crypto under the same trading halt rules used by the Korea Exchange.
The recommendation appears in the central bank’s annual Payment and Settlement Systems Report, published on April 13, and calls for automatic stops when crypto prices fluctuate sharply or abnormal orders hit the book. The central bank said the rules should be folded into the pending Digital Asset Basic Act.
The catalyst for the policy proposal comes from an incident at Bithumb in February, where an employee running a promotion entered the reward unit as “BTC” instead of “KRW,” and distributed about 60 trillion won ($43 billion) in phantom bitcoin before supervisors caught the error 20 minutes later. Panic selling plunged BTC on Bithumb down 17%, while the token continued to trade at market prices on other venues.
Upbit, Bithumb and Korea’s three other licensed exchanges already run high-speed matching engines with price collars and fat-finger checks built in. CME Group runs a similar system on bitcoin futures, halting trading for two minutes when prices move 10% within a 60-minute window.
The more difficult question is whether stops would work given the global nature of BTC trading. If Upbit paused for 20 minutes, bitcoin would continue to trade on Binance, Coinbase and dozens of others — and Upbit’s price would fall to wherever global markets moved when it reopened.
Circuit breakers are a familiar tool of traditional finance, a visible signal that markets are being brought under control. But crypto doesn’t have a single place to stop, and the problems regulators are trying to solve don’t map neatly to price volatility.
