Bank of Korea Proposes Crypto Circuit Breakers to Prevent Market Crashes

The Bank of Korea is pushing for the introduction of circuit breaker mechanisms on crypto exchanges to prevent sudden market breakdowns and extreme volatility.

The proposal follows a major operational failure at Bithumb, where an internal error triggered a massive and unintended bitcoin distribution, leading to a flash crash and significant investor losses. Regulators highlighted that crypto platforms currently lack the internal controls and safeguards commonly found in traditional financial markets.

To address these risks, the central bank is urging exchanges to implement trading halts during abnormal price swings, along with real-time verification systems to ensure balances match on-chain data. The move reflects a broader push to bring institutional-grade protections into the crypto industry, aiming to reduce systemic risk and improve investor confidence. As regulators tighten oversight, the introduction of circuit breakers could mark a major step toward aligning crypto markets with global financial standards.

Clever Robot News Desk 15^th April 2025