Following the Bithumb incident, South Korean regulators announced tighter oversight of the crypto market, intensifying investigations into price manipulation and operational risks on exchanges.
South Korea tightens oversight of the crypto market following the Bithumb incident.
South Korean financial regulators have recently issued a tougher stance on the cryptocurrency market following a series of incidents and unusual fluctuations on domestic exchanges, particularly after Bithumb mistakenly transferred approximately $44 billion worth of Bitcoin during a "Random Box" reward distribution.
According to Yonhap, Korea's FSS announced its 2026 plan on Feb 9: investigations into high-risk crypto manipulations (whale, containment/ramp schemes, API orders, SNS rumors) with AI text/surge detection tools; new Digital Asset Basic Act group for phase-2 legislation…
— Wu Blockchain (@WuBlockchain) February 9, 2026
FSS intensifies investigations into price manipulation and operational risks.
According to Yonhap, the Financial Supervisory Service (FSS) of South Korea announced it will intensify its monitoring and investigation of crypto price manipulation in 2026, and will also impose stricter penalties for IT incidents across the entire financial sector.
Specifically, the FSS stated it will investigate practices that manipulate Token prices instead of reflecting actual supply and demand. This includes massive transactions by whales to create artificial price fluctuations, as well as pump-dump schemes that occur when exchanges temporarily suspend Token deposits or withdrawals. In South Korea, this is known as "gating," where supply becomes trapped on a particular exchange, causing prices to be artificially pushed up or down, deviating from the global market average.
- In addition, the regulatory agency will also review forms of manipulation through market orders using APIs, allowing transactions at high speed and frequency to distort prices, as well as the dissemination of misinformation on social media to incite FOMO or cause panic among investors.
Notably, FSS stated it will strengthen automated monitoring measures, including analyzing unusual price fluctuations in very short timeframes, developing tools to identify "manipulation zones" and related account groups.
- Since the beginning of February, the agency has also expanded the use of AI-powered monitoring tools, aiming to reduce reliance on manual review methods.
The Bithumb incident has increased management pressure.
- The strong action by the regulatory body comes immediately after the serious incident at Bithumb, the second-largest crypto exchange in South Korea.
- As Coin68 reported, during the "Random Box" event, Bithumb mistakenly transferred a total of 620,000 BTC to the accounts of hundreds of users, with an estimated value of approximately $44 billion. Instead of receiving 2,000 won (about $1.50) as expected, the system mistakenly recorded 2,000 BTC for each person, causing some accounts to quickly sell, driving the BTC/KRW price on the exchange down by about 15% compared to other exchanges.
- Although Bithumb immediately froze the involved accounts, activated risk control mechanisms, and claimed to have recovered 99.7% of the mistakenly transferred Bitcoin, the incident still caused significant price fluctuations in a short period, forcing the exchange to implement compensation measures for affected users.
According to Asia Business Daily , following this incident, the Financial Services Commission (FSC) immediately held an emergency review meeting with FSS and KoFIU, in which the regulators reportedly requested a comprehensive review of the internal control systems of all domestic crypto exchanges.
- Not only Bithumb, but the FSS also stated that it is XEM the unusual price fluctuations of the ZKsync Token during Upbit 's system maintenance. The agency said it is analyzing transaction data and does not rule out the possibility of upgrading to a formal investigation if signs of manipulation are detected.
Upbit asserts that the exchange has an internal system to detect suspicious activity and is ready to provide transaction data immediately upon request from regulatory authorities.
Preparing for the next phase of the crypto legal framework.
- In parallel with tightening market supervision, the FSS has also established a dedicated task force to prepare for the implementation of the Digital Asset Basic Act , the second phase in the roadmap to complete the legal framework for regulating crypto in South Korea.
- This group will focus on developing information disclosure standards for Token Issuance activities, establishing monitoring mechanisms and supporting Token listing on exchanges, and finalizing licensing standards for digital asset service providers and stablecoin issuers.
- The final version of the legislation is expected to be completed in Q1/2026, marking a significant step forward in efforts to protect investors in one of Asia's most vibrant crypto markets.
Coin68 compilation
