$40B Crypto Blunder Shakes Seoul: South Korea Slams the Brakes With Brutal New Crypto Laws
South Korea Tightens Crypto Rules After Bithumb Incident Exposes Systemic Risks
South Korea is moving swiftly to strengthen its cryptocurrency regulatory framework following a dramatic operational error at one of the country’s largest exchanges. The incident, which involved the accidental distribution of more than $40 billion worth of Bitcoin to users, has become a defining moment for regulators seeking tighter oversight of the digital asset industry.
On February 9, 2026, the Financial Supervisory Service (FSS) said the Bithumb mishap revealed structural weaknesses in virtual-asset systems and underscored the urgency of stronger safeguards to protect investors and preserve market stability.
Although the exchange later confirmed…
