Seoul: All crypto exchanges in South Korea are asked to set up a system to check and verify their internal ledgers with actual crypto holdings every five minutes, the financial regulator said Monday.

According to Yonhap News Agency, the Financial Services Commission (FSC) reported that three out of five major crypto exchanges in South Korea have been reconciling their asset matching every 24 hours. The remaining two exchanges have been balancing their internal ledgers with actual holdings every five to ten minutes.

Additionally, the FSC found flaws in the exchanges' trade-halting systems, or kill switches, which were ineffective when a significant asset mismatch occurred. As a result, the regulator mandated that all crypto exchanges establish a five-minute asset-matching system by the end of May. Exchanges must also disclose their asset-matching balance daily, with monthly external checks conducted by accounting firms.

Related regulations are being developed into a bill aimed at regulating the virtual asset market comprehensively. The government, along with the ruling Democratic Party, is collaborating to refine this bill.

The FSC's initiative follows an incident involving Bithumb in February, where the crypto exchange mistakenly sent 620,000 bitcoins to 249 users during a promotional event. This error temporarily impacted bitcoin prices and highlighted deficiencies in Bithumb's internal control system. Although most of the mistakenly sent bitcoins were recovered, the incident underscored the need for more stringent asset management practices across the industry.