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South Korea requires cryptocurrency exchanges to verify assets every 5 minutes to strengthen internal controls

The Financial Services Commission (FSC) of South Korea announced on Monday that, in response to the internal control vulnerabilities exposed by the recent Bithumb payment incident, it has required all domestic cryptocurrency exchanges to conduct reconciliations of their ledgers and actual assets every five minutes.Emergency inspections revealed that three of the five major exchanges in the country only reconcile once a day, making it difficult to timely identify and address discrepancies; some systems are unable to automatically suspend trading when significant mismatches occur, raising regulatory concerns. According to the new regulations:Exchanges must establish an automated ledger-wallet reconciliation system with a cycle of five minutes.Standards for triggering automatic trading suspension due to significant discrepancies must be set.High-risk processes (such as promotional payments) must undergo enhanced scrutiny, including third-party reviews and multi-level approvals.High-risk accounts must be managed independently, and payments must use automated verification tools.The frequency of external audits will change from quarterly to monthly, with the disclosure scope expanded to include detailed asset balances by wallet and ledger. The FSC stated that it will complete the relevant rule revisions by April 2026. Previously, Bithumb announced that its IPO plan would be postponed until after 2028 to strengthen internal controls and accounting policies by 2027; at the same time, the equity swap between Naver Financial and Dunamu will also be completed by the end of September.
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