Citing the lack of necessary systems as a major contributing reason to a recent incorrect payment event, the central bank on Monday demanded the implementation of mechanisms akin to the market operator’s circuit breakers for cryptocurrency exchanges.
Due to an employee entry error, Bithumb accidentally distributed 620,000 bitcoins worth around 60 trillion won in February instead of the approximately 620,000 won ($460) that were intended to be given out as prizes for a customer event.
Bitcoin prices on Bithumb briefly dropped as a result of several customers selling off the incorrectly credited bitcoins in huge quantities just after the incident. Some bitcoin-backed loans were forced to be liquidated, and other users lost money as a result of panic selling and automated sell orders.
The Bank of Korea (BOK) stated in its yearly payment and settlement report that “the primary cause was the lack of internal control systems designed to prevent such operational risks”. “Compared to traditional financial institutions, the crypto asset industry has weaker internal controls and lower regulatory standards.”
Bithumb permitted employees to distribute bitcoin at the time of the occurrence without supervisor consent or internal monitoring department verification.
The exchange’s fraud detection system malfunctioned, and delays in identifying the issue and reacting to it were also mentioned as factors that exacerbated the harm, according to the BOK.
Source: X.com
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