South Korea’s second-largest cryptocurrency exchange, Bithumb, is attempting to recover more than $40bn (£33bn) in digital assets after mistakenly crediting customers with 620,000 bitcoins during a promotional event. The error, which occurred on 6 February, saw an employee enter prize amounts in bitcoin rather than Korean won, sending 620,000 bitcoins instead of the intended 620,000 won ($423) to 695 qualifying customers.
Of those eligible, 249 customers opened their prize boxes, receiving roughly 14 times more bitcoin than the exchange holds. Bithumb said it had corrected most of the erroneous credits by reversing internal ledger entries, but about 13bn won ($9m) remained unrecovered after some recipients sold or withdrew funds before the mistake was detected. Financial authorities said 86 customers sold approximately 1,788 bitcoins in the 35 minutes before the exchange froze affected accounts, triggering a brief price drop on its platform.
Lee Chan-jin, governor of South Korea’s Financial Supervisory Service (FSS), described the incident as “catastrophic” for those who sold the bitcoin they received, noting that rising prices since Friday could leave customers facing losses if required to return the cryptocurrency. He added that the episode exposed “structural problems” in how exchanges operate internal ledger systems. Legal experts are divided on whether recipients could face criminal prosecution, given a 2021 Supreme Court ruling that cryptocurrency does not constitute “property” under Korean criminal law.
Bithumb has apologised and said it is holding “one-on-one persuasion” talks with around 80 customers who cashed out, asking them to voluntarily return the won equivalent. The exchange is reportedly seeking to avoid civil lawsuits, where courts could order the return of the original asset rather than its cash equivalent.
The FSS has escalated its response to a full investigation, and South Korea’s parliament has scheduled an emergency hearing for 11 February to question both the exchange and financial authorities. In a statement, Bithumb said: “We want to make it clear that this incident is unrelated to any external hacking or security breach, and does not pose any issues with system security or customer asset management.” The exchange added that it would redesign its entire asset payment process and enhance internal controls to prevent a recurrence.
