$44B sent by mistake: South Korea demands tougher crypto regulations

South Korea’s financial market watchdog has called for implementing strict crypto-related rules and regulations.

The announcement comes as South Korean cryptocurrency exchange Bithumb had mistakenly sent more than $40 billion worth of bitcoins to customers as promotional rewards on Friday.

Later, Bithumb assured that it had been successful in recovering around 99.7 percent of the 620,000 bitcoins, having the worth of $44 billion at current prices. Of the 1,786 bitcoin already sold before the exchange suspended transactions, 93 percent were retrieved.

Such an expensive crypto error has not only exposed the vulnerabilities of cryptocurrencies but also raised concerns among South Korean regulatory authorities.

According to Lee Chan-jin, governor of the Financial Supervisory Services, given the scale of giveaway blunder, there is the need of the hour to enact improved regulatory mechanisms to tackle such risks.

"It is a case that shows the structural problems of information systems for virtual assets. There are many areas we are seriously looking into, and we are particularly worried about the issue of information systems," Lee said.

Moreover, the authorities will enact significant legislation, aiming to bring digital assets under strict scrutiny.

The watchdog would also resolve the issue of “ghost coin”, a major step for making cryptocurrencies as legacy financial assets.

The government policy plan revolves around rolling out spot bitcoin exchange-traded products.

According to Lee, prior to restricting the transaction, people who sold the given bitcoin, they would be obligated to return them to exchange.