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BTCC / BTCC Square / Global Cryptocurrency /
Bithumb Exchange Faces Scrutiny Amid South Korea’s Crypto Custody Crisis

Bithumb Exchange Faces Scrutiny Amid South Korea’s Crypto Custody Crisis

Author:
Global Cryptocurrency
Published:
2026-03-02 17:09:32
18
3
Bithumb exchange News -

South Korean authorities have ordered a comprehensive review of digital asset custody protocols following a high-profile incident where police lost access to seized bitcoin worth $1.4 million. Finance Minister Koo Yoon-cheol confirmed a full-scale inspection across government agencies, revealing systemic failures in crypto asset management.

The investigation uncovered startling lapses—Gangnam police never secured the seed phrase for the confiscated Bitcoin wallet, rendering the assets irretrievable. Two individuals have been arrested in connection with the mishandling case as authorities expand their probe into institutional custody failures.

Concurrently, major exchange Bithumb grappled with technical glitches that erroneously credited users with substantial Bitcoin balances, compounding regulatory concerns. The Finance Ministry is now coordinating with the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) to implement stringent operational controls for public sector crypto holdings.

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