South Korea’s second-largest cryptocurrency exchange, Bithumb, credited customers with 620,000 bitcoins by mistake during a promotional event, leaving more than $40 billion in cryptocurrency to be recovered. The error occurred on February 6 when prize amounts were entered in bitcoin rather than Korean won, and Bithumb said it had corrected most of the credits, but about 13 billion won ($9 million) remained unrecovered after some recipients sold or withdrew the funds before the error was detected. Of the 695 eligible customers, 249 opened their prize boxes and received rewards, equivalent to roughly 14 times more bitcoin than the exchange owns. Bitcoin prices have risen since Friday, meaning any customers asked to return cryptocurrency could face losses.
Lee Chan-jin, governor of South Korea’s Financial Supervisory Service (FSS), called it catastrophic for those who sold the bitcoin they received and said the incident exposed structural problems in how exchanges operate internal ledger systems. Separately, legal experts are divided on whether recipients who sold what they received could face criminal prosecution, given a 2021 supreme court ruling that cryptocurrency does not constitute “property” under Korean criminal law. Bithumb said it corrected 99.7% of the erroneous credits by reversing internal ledger entries and issued an apology; however, 86 customers sold about 1,788 bitcoins in the 35 minutes before the exchange froze the affected accounts, triggering a brief price drop on its platform. The exchange is now holding what it described as “one-on-one persuasion” talks with roughly 80 customers who cashed out, asking them to return the won equivalent voluntarily and reportedly seeking to avoid civil lawsuits.
The FSS escalated its response to a full investigation, while Parliament scheduled an emergency hearing for 11 February to question both the exchange and financial authorities. Bithumb said in its apology that it would redesign the entire asset payment process and enhance internal controls, stressing that the incident is unrelated to external hacking or security breaches. The incident has drawn attention to structural weaknesses in how exchanges manage internal ledgers and asset transfers, prompting regulators to scrutinize risk management and compliance practices across the crypto sector as authorities consider penalties and civil actions while Bithumb pursues voluntary restitution to avoid litigation and preserve customer trust and system integrity.
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