South Korea’s second-largest cryptocurrency exchange, Bithumb, faces a massive operational crisis after accidentally crediting 620,000 bitcoins to customer accounts during a promotional event on February 6. The intended giveaway was worth just 620,000 won ($423) in total, but a misentered ledger resulted in prizes equivalent to roughly $40 billion. While the exchange has reversed the majority of the erroneous credits, approximately 13 billion won ($9 million) remains unrecovered after some recipients sold or withdrew the funds before the error was detected.
The incident occurred when an employee entered prize amounts in bitcoin instead of Korean won for a “random box” promotion, affecting 695 customers. Of these, 249 claimed the prizes, each receiving far more bitcoin than Bithumb actually holds. The Financial Supervisory Service (FSS) of South Korea has labeled the event “catastrophic” for those who sold their unintended windfall, warning that any customers asked to return bitcoin may face losses due to recent price increases. The incident has also exposed structural weaknesses in how exchanges manage internal ledger systems, raising questions about operational resilience in South Korea’s booming crypto market.
Bithumb confirmed it corrected 99.7% of the miscredits through internal ledger reversals and issued a formal apology, emphasizing that the error was unrelated to any external hack or security breach. However, financial authorities reported that 86 customers sold roughly 1,788 bitcoins within 35 minutes before accounts were frozen, causing a temporary price drop on the platform. Some funds were withdrawn to personal accounts, while others were converted to alternative cryptocurrencies. Bithumb is now conducting “one-on-one persuasion” discussions with roughly 80 customers who cashed out, seeking voluntary returns to avoid civil litigation that could compel asset recovery rather than a cash equivalent.
Legal experts are divided on whether recipients who sold bitcoin could face criminal liability, citing a 2021 Supreme Court ruling that cryptocurrency does not constitute “property” under Korean criminal law. The FSS has escalated its response to a full investigation, and South Korea’s parliament has scheduled an emergency hearing for February 11 to question both Bithumb and financial authorities.
From a market perspective, the episode underscores how human error in ledger management can cascade into billion-dollar impacts in volatile digital asset markets. It also highlights the regulatory challenges surrounding cryptocurrency, including classification, liability, and the mechanisms for recovering mistakenly issued digital assets. For exchanges and investors alike, this event serves as a stark reminder of the need for rigorous internal controls and robust contingency planning.
Looking forward, Bithumb plans to redesign its entire asset payment process and enhance internal controls to prevent recurrence. While the immediate financial fallout is being managed, the incident may influence broader regulatory oversight in South Korea, potentially shaping compliance standards and operational protocols for exchanges across Asia’s rapidly evolving crypto ecosystem.
