After Bithumb Scandal, South Korea Launches Total Surveillance of Crypto Market: New Rules for “Whales” and Exchanges

February 10, 2026, Seoul. Sometimes, for a regulator to finally put its gloves on properly, it takes one loud, ridiculous, and very expensive failure. For South Korea’s Financial Supervisory Service (FSS), that failure was the “error of the century” on one of the country’s largest exchanges, Bithumb. Last week, by a happy (or terrible) accident, it credited users with not thousands of won, but at least 2,000 bitcoins. The estimated value of the gift at the time of the incident was about $44 billion. That is not a typo. Forty-four billion dollars (~$44 billion*).

Naturally, the market couldn’t stomach such generosity. The price of Bitcoin on Korean platforms instantly plummeted 30% below global quotes as panicked users scrambled to sell their unexpected windfall. Bithumb, coming to its senses, blocked trading and withdrawals for the 695 lucky individuals, but the genie was already out of the bottle. And now, judging by its statements, the regulator intends not just to put the genie back, but to completely redesign the bottle and the rules for handling it.

What Exactly Does the FSS Plan? Not Just “Catching Whales”

The official statement from the FSS, cited by the Yonhap News Agency, paints a picture of comprehensive tightening. This is not about spot fines, but a systemic change of the game’s rules.

1. War on Manipulation. The regulator is initiating scheduled inspections of “practices that disrupt market order.” The focus is on classic crypto market scourges: price manipulation by “whales,” coordinated price-pumping campaigns via social media, and schemes involving the freezing of deposits and withdrawals (to trap traders during sharp market movements).

2. Technological Supervision. This is perhaps the most interesting and indicative point. The FSS plans to implement real-time automated transaction analysis systems—scanning the market by the second. Moreover, the regulator intends to use AI-based algorithms to analyze texts (presumably in messengers and social networks) to detect misinformation schemes. Essentially, this is creating its own “big brother” for the crypto industry.

3. Personal Accountability. Fines for IT incidents will be increased, and the personal responsibility of top managers and Chief Information Security Officers (CISOs) will be heightened. Now, for a “technical screw-up” like the one at Bithumb, not only the company but specifically its leadership will be held accountable.

Collectively, these measures aim to create a more transparent, technologically secure, and—importantly—accountable environment. The regulator is moving from reacting to scandals to their preventive detection and prevention. This marks a qualitatively new stage in crypto market regulation: from the era of bans and warnings to the era of active, total digital surveillance.

The Korean Precedent: Why It Matters for the Whole World

South Korea is not just one of many countries with a crypto market. It is one of the most active, emotional, and liquid markets in the world, where retail investors play a huge role. The FSS’s actions create a powerful regulatory precedent.

First, they show that exchanges’ technological errors are equated with systemic risks to overall financial stability. A bug in the code can crash a national market segment by 30%—an argument that is hard to dispute.

Second, the “real-time” approach and AI-powered social media analysis are the next logical step in digital asset regulation. If this model proves effective, it is highly likely to be adopted by regulators in other jurisdictions, from Japan to possibly the EU.

Third, it’s a signal for major players (“whales”) and the exchanges themselves. The era of the “Wild West,” where markets could be moved by coordinated actions in chat rooms, is coming to an end. More precisely, it is ending in Korea—one of its key strongholds.

Lesson for Ukraine: Regulation as Infrastructure

While Ukraine is still forming its legislative framework for virtual assets, the Korean scenario offers important lessons.

1. Regulator’s Technological Competence is a Must-Have. Writing laws is not enough. The supervisory body must have or develop its own technological capabilities for market analysis; otherwise, it will always be one step behind.

2. Security is Personal Responsibility. The idea of personal accountability of executives for IT security is a powerful incentive for exchanges to invest in quality control systems, not just hope for the best.

3. Crisis is an Opportunity for Change. The FSS used the Bithumb crisis not just to “punish the guilty,” but to justify and launch a systemic reform. This is a professional approach.

Local Insight: For global crypto exchanges, institutional investors, and fintech companies, Korea’s new regulatory stance signals a future where compliance and robust tech infrastructure will be non-negotiable entry tickets to major markets. This reinforces a trend towards institutionalization and could push smaller, less secure platforms out.

The $44 billion incident may have become the most expensive lesson in the history of the crypto industry. But it seems it will not be in vain. The Korean market, known for its volatility and enthusiasm, is preparing for a painful but necessary “adult” therapy. And the rest of the world will be watching closely to see how effective it turns out to be.

*Note: Conversion to US Dollars is based on the original figure. For reference, this amount is approximately 1,893 trillion Ukrainian Hryvnias (UAH)*. Calculations are approximate based on the NBU exchange rate as of 10.02.2026. You can check the current rate here: Currency Converter.