South Korea Cracks Down on Crypto Exchanges with Stricter Reconciliation Requirements

South Korea's Financial Services Commission (FSC) has taken steps to tighten oversight of cryptocurrency exchanges in the country. Following an inspection launched after a payout error at Bithumb earlier this year, regulators have ordered platforms to reconcile their internal ledgers with actual asset holdings every five minutes.

This new requirement is aimed at preventing operational errors and ensuring that exchanges can detect and respond to discrepancies on time. Regulators found that some of the country's largest exchanges were only reconciling balances once every 24 hours, leaving them vulnerable to large-scale mistakes.

Exchanges must now implement automated systems that match internal records with wallet balances, as well as define clear thresholds for triggering automatic transaction halts if discrepancies exceed set limits. Additionally, high-risk processes such as promotional payouts will require stronger controls, including third-party cross-checks and multi-level approval systems.