South Korea’s second-largest cryptocurrency exchange, Bithumb, is seeking to recover billions after a staff error credited customers with 620,000 bitcoins during a promotional event. This mistake briefly transferred cryptocurrency valued at about $40bn, far exceeding the exchange’s own bitcoin holdings. Bithumb said it had quickly corrected most entries, yet about 13bn won, roughly $9m, remains unrecovered after some users sold or withdrew funds.
The error occurred on 6 February during a “random box” promotion. An employee entered prize amounts in bitcoin rather than Korean won, according to a report by The Guardian. The promotion aimed to distribute 620,000 won to 695 customers, not bitcoins.
Out of those eligible, 249 customers opened their boxes and received the incorrect credits. The total amount of bitcoin sent was roughly 14 times what the exchange reportedly owns. Bithumb later said it had recovered 99.7% of the bitcoins mistakenly credited.
Some recipients sold or withdrew the cryptocurrency before the error was detected. As a result, Bithumb said 13bn won remains outstanding despite ongoing recovery efforts. The exchange has since contacted about 80 customers who have cashed out, held one-on-one discussions with them, and asked them to voluntarily return the won equivalent.
Bithumb aims to avoid civil lawsuits that could require the return of the original asset. Market conditions are adding further pressure to this recovery process, with Bitcoin prices rising since Friday. Customers required to return bitcoin could now face losses. Lee Chan-jin, governor of South Korea’s Financial Supervisory Service, described the incident as “catastrophic” for those who sold.
He said the case revealed structural problems in exchange ledger systems. That assessment raised broader concerns over internal controls across the sector. Could this incident reshape how cryptocurrency exchanges handle internal controls?
South Korea’s financial watchdog moved quickly after the disclosure. The Financial Supervisory Service held an emergency meeting on Saturday. It said any signs of illegal activity would trigger formal investigations.
The regulator later escalated its response to a full investigation. South Korea’s parliament scheduled an emergency hearing for 11 February. Lawmakers plan to question both Bithumb and financial authorities.
Legal experts remain divided on potential criminal liability. A 2021 Supreme Court ruling held that cryptocurrency does not constitute property under Korean criminal law. That precedent complicates possible prosecutions for recipients who sold the assets.
Bithumb repeatedly denied any security breach. The company said the error had no link to hacking or external attacks. It said customer asset management and system security remained intact.
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Bithumb said it will redesign its asset payment process. It also plans to introduce artificial intelligence to detect abnormal transactions. The exchange described these steps as part of broader internal control reforms.
Regulators said the incident may prompt tighter financial oversight. The case has already drawn comparisons with errors in traditional finance. Such parallels have sharpened debate on operational risk.
In April 2024, Citigroup mistakenly credited $81 trillion instead of $280 to a customer account. Two employees failed to catch the mistake before processing. A third employee later spotted the error, allowing reversal within hours.
That incident was reported by the Financial Times. Unlike the Bithumb case, the bank reversed the transaction quickly. This contrast has fueled discussions about safeguards on digital asset platforms.
Bithumb said it is taking the incident seriously. The exchange pledged to prevent a recurrence through tighter controls while continuing recovery talks amid intensifying regulatory scrutiny.
Bithumb is working to recover funds after a bitcoin error credited customers with 620,000 bitcoins during a promotion. Most assets were retrieved, yet some losses remain. Regulators launched a full investigation, while the exchange pledged tighter controls and improved verification systems to prevent future payment mistakes.