Seven Former Financial Supervisory Service Officials at Bithumb! Watchdogs Turned Lobbyists as Oversight Is Breached
Seven Former Financial Supervisory Service Officials at Bithumb! Watchdogs Turned Lobbyists as Oversight Is Breached
Controversy is spreading over supervisory responsibility surrounding the recent “ghost coin” overpayment incident after it was revealed that financial authorities inspected cryptocurrency exchange Bithumb six times over the past five years. As key weaknesses in internal IT controls were not detected despite repeated on-site inspections, calls are growing for a comprehensive review of the overall supervisory system.
According to data submitted by the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) to the office of Rep. Kang Min-guk of the People Power Party on the 12th, the FSC reviewed Bithumb three times between 2021 and 2025, while the FSS conducted a total of three inspections, including two ad hoc examinations and one regular review. On the surface, this suggests that a considerable level of oversight was carried out.
However, the computer system that allowed erroneous input—identified as the direct cause of the incident—the structure enabling a single employee to manipulate and issue large quantities of coins, and loopholes in the linkage between held balances and ledger records were not detected in advance. Critics argue that authorities failed to identify core risks despite conducting multiple on-site inspections.
During an emergency parliamentary inquiry, Rep. Kang stated that the incident is difficult to regard as a simple system error, raising concerns about structural vulnerabilities in the virtual asset market as well as deficiencies in regulatory oversight. Rep. Han Chang-min of the Social Democratic Party also questioned whether inspections had been merely superficial and criticized the view that supervisory responsibility should not be limited solely to Bithumb.
The reemployment of former supervisory officials at cryptocurrency exchanges has also come under scrutiny. Since 2021, a total of 16 former FSS officials have moved to virtual asset exchanges, with seven of them joining Bithumb. Some point out that this could give rise to public mistrust regarding the credibility of inspections.
As the regulatory framework for the virtual asset market is still considered to be in a transitional phase, discussions on strengthening oversight are expected to accelerate further. The fact that vulnerabilities remained despite repeated inspections highlights once again the need for institutional improvements.
Disclaimer: This article is provided for investment reference only, and we are not responsible for any investment losses arising from it. The content should be interpreted solely for informational purposes.
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