South Korea FSC investigates Bithumb Bitcoin payout error

The FSC held its first meeting of the year to discuss Bithumb’s virtual asset shortage and secure compensation for those affected. The regulator also signaled readiness to redefine virtual assets to match global definitions and allow for more diverse business models during the meeting. 

The South Korean Financial Services Commission (FSC) held two major meetings today at the Seoul Government Building. These meetings focused on resolving the recent 60 trillion won Bithumb “shortage” crisis and establishing a long-term legal framework for token securities.

FSC plans stronger scrutiny of Bithumb and others

Vice Chairman Kwon Dae-young led the first meeting of the Virtual Asset Committee for 2026. This committee functions as the legal policy organization responsible for the nation’s crypto-asset rules.  

First on the FSC’s agenda was the infamous Bithumb shortage crisis that started when, during a “Random Box” promotional event, a staff member intended to credit winners between 2,000 and 50,000 KRW, which is worth about $1.40–$35. 

Instead, the employee mistakenly set the payout unit to Bitcoin (BTC), and the users who were supposed to receive a few dollars suddenly saw 2,000 to 50,000 BTC worth billions of dollars each in their accounts.

The FSC plans to push Bithumb and other relevant parties to pay back users for the damages caused by the shortage.

To prevent this from happening again, the FSC is aiming to launch a “two-track” policy that will tighten risk management while also expanding the market base. 

The committee stated that exchanges must follow stricter rules for how they manage their internal operations. 

New standards are expected to be set for computer systems and cybersecurity to prevent technical failures, and the government is considering a rule where exchanges are held liable for damages even if they claim they were not negligent.                                                                

South Korea’s FSC aims for global consistency 

The committee also discussed the Digital Asset Framework Act, also known as the Phase 2 Act. The law aims to start creating a full regulatory system for digital business operators. 

A major part of this discussion was changing the legal definition of virtual assets. Currently, Korea’s definition of a virtual asset is an electronic certificate with economic value that can be traded or transferred electronically. 

The FSC wants to change the terminology to match global consistency in order to help Korean businesses integrate with the global market and support more diverse business models within the country.

Further discussions during the meeting touched on the future of stablecoins. The committee suggested a model for issuing stablecoins where banks would hold at least 50% plus one share of the stake to ensure that digital currencies used for payments remain stable and backed by traditional financial institutions.

What is the future of digital investments in Korea?

The Token Securities Consultation Body held its official kick-off meeting today. The body is a joint group of government officials, private experts, and financial institutions whose job is to design the infrastructure for the Token Securities Institutionalization Act, scheduled to go into full effect on February 4, 2027.

Token securities are traditional securities, like stocks or real estate interests, that are issued and managed using blockchain technology. The FSC Chairman Lee Won explained that token securities are a structural change in how the capital market works. 

For this new sector, the government first plans to create a digital innovation financial ecosystem to make it easier for people to invest in specific projects or underlying assets, such as music rights, artwork, real estate, and even livestock. 

By using blockchain smart contracts, these investments can be broken down into smaller, more accessible pieces.

Second, the FSC is building a customized investor protection system. Token securities are legally securities, so they must follow the Capital Market Act. However, because they use new technology, the government plans to refine the rules to fit the technical nature of blockchain. 

Third, the government is preparing for on-chain payment systems. Currently, it takes users two days to receive the payment from a sale (T+2 payment). The goal for token securities is a T+0 payment that would allow users to settle transactions and withdraw their money on the same day, 24 hours a day, using stablecoins for payment.

The FSC plans to hold intensive discussions through the first half of 2026 to finalize the design of the Token Securities Consultation Body. It will operate through four specialized divisions, one focusing on technology and infrastructure, while the others are concerned with issuance, distribution, and payment.

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