South Korea Imposes 5-Minute Audit Rule On Crypto Platforms

Bithumb has postponed its stock market listing until at least 2028 due to a need to improve its accounting systems and internal controls. This decision follows a significant error in a crypto payout during a rewards promotion that attracted regulatory scrutiny. South Korean regulators have mandated that all crypto exchanges must reconcile their internal records with actual asset holdings every five minutes. This new directive was prompted by an inspection revealing inadequate systems at major exchanges, some checking their books only daily. Exchanges must now implement automated systems to detect and halt trading when discrepancies arise. High-risk activities, such as promotional payouts, will require multi-level internal approvals and third-party reviews. Additionally, high-risk accounts need separation, and automated payment verification tools are now mandatory. The frequency of external audits will increase from quarterly to monthly, with exchanges required to publish detailed asset breakdowns. Bithumb has engaged advisory firm Samjong KPMG to overhaul its financial policies and controls. Separately, Naver Financial has delayed its planned share swap with crypto firm Dunamu. These regulatory actions underscore South Korea's intensified efforts to oversee its crypto market and reduce the margin for error for exchanges.