South Korea has ordered all virtual currency exchanges to check their internal ledgers against their actual holdings every five minutes after inspections revealed weaknesses in their internal controls.
The directive was announced by the Financial Services Commission (FSC) on Monday after a meeting with major crypto exchanges and the Digital Asset Exchange Alliance (DAXA), during which they discussed the results of an emergency inspection stemming from the Bithumb payments scandal.
The inspection found that three of the country’s five major exchanges only reconcile balances once every 24 hours, limiting their ability to quickly respond to discrepancies. Systems designed to halt trading when large mismatches occur have also proven inadequate, raising concerns about how exchanges will deal with large-scale errors.
In February, Bithumb accidentally distributed 620,000 Bitcoins ($BTC) to 249 users during promotional events. The exchange later announced on the same day that it had recovered 99.7% of the funds. Remaining 0.3% 1,788 $BTC The portion that had already been sold was covered by the company’s reserves.
Related: Bithumb aims to reappoint CEO despite recent controversy: report
South Korea mandates 5-minute asset inspection
Under the new measures, exchanges will be required to implement an automated ledger and wallet reconciliation system that operates on five-minute cycles. They are also required to implement defined criteria to trigger automatic trading suspensions in the event of a material discrepancy.
Beyond a settlement, regulators are seeking significant changes to internal operations. High-risk processes such as promotional payments require stronger oversight, including third-party cross-checks and multi-level approval systems. Exchanges will also need to segregate high-risk accounts and introduce automated verification tools for payments.
Additionally, external audits will move from quarterly to monthly, and disclosures will expand to include detailed asset balances by wallet and ledger.
“The financial authorities and DAXA plan to complete the necessary rule changes to implement the improvements by the end of April this year,” the FSC wrote.
Related: Korean securities company Korea Investment Securities focuses on Coinone stock: Report
Bithumb postpones IPO to 2028 or later
Bithumb announced last week that it is targeting an IPO after 2028, another delay from its original 2025 plan as it deals with restructuring and regulatory pressures. The exchange announced that it will focus on strengthening its accounting policies and internal controls until 2027, pursuant to its advisory agreement with Samjong KPMG.
Meanwhile, Naver Financial has also postponed its share exchange plan with Dunum by about three months, holding a shareholder vote on August 18th and aiming to complete it by September 30th.
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