Despite Bithumb Incident, Government Says Impact on Financial Markets Limited, Launches Full Inspection of Exchanges

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The government assessed that despite the recent sharp price fluctuations in the virtual asset market, the likelihood of spillover effects across the broader financial system remains limited.

According to the Ministry of Economy and Finance on Feb. 13, Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol held a “market situation review meeting” at the Korea Federation of Banks in central Seoul with Bank of Korea Governor Rhee Chang-yong, Financial Services Commission Chairman Lee Eok-weon, and Financial Supervisory Service Governor Lee Chan-jin to examine recent trends in the financial and capital markets. Participants agreed that although volatility in virtual asset prices has increased, the possibility of it directly transmitting instability to the broader financial market is limited at this stage.

However, authorities decided to step up their response to prevent the recent “Bithumb incident” from further undermining trust in the virtual asset market and spreading additional instability. The government and financial regulators will conduct a comprehensive review of exchanges’ internal control systems, push forward institutional improvement measures, and further strengthen market monitoring functions.

At the meeting, officials also assessed that while the stock market continues its upward trend, volatility has expanded. They noted that government bond yields have edged higher, influenced by rising Japanese interest rates and bond supply-and-demand pressures.

Accordingly, relevant agencies agreed to enhance monitoring of the overall bond market, including government bonds, centered on the market situation review meeting. Through consultative bodies of bond-issuing institutions, they plan to closely examine supply and demand conditions and discuss response measures if necessary.

Deputy Prime Minister Koo pointed out that external risks, including the monetary policy stance of major economies and U.S. tariff policies, still persist. He urged each institution to closely monitor market conditions and respond preemptively, even during the Lunar New Year holiday period.

This article is provided for informational purposes only and does not constitute financial or investment advice.