South Korea's second-largest cryptocurrency exchange, Bithumb, is scrambling to recover over $40bn (£32bn) of bitcoin after mistakenly crediting customers with 620,000 bitcoins instead of 620,000 Korean won during a promotional event on 6 February. The error, caused by an employee entering prize amounts in bitcoin rather than won, sent about $42bn worth of cryptocurrency to 695 qualifying customers.
Bithumb said it has corrected 99.7% of the mistaken credits by reversing internal ledger entries, but about 13bn won ($9m) remains unrecovered. In the 35 minutes before the exchange froze affected accounts, 86 customers sold roughly 1,788 bitcoins, triggering a brief price drop on its platform. Some funds were withdrawn to personal bank accounts or used to buy other cryptocurrencies.
Lee Chan-jin, governor of the Financial Supervisory Service (FSS), called the incident 'catastrophic' for those who sold the bitcoin, as rising prices mean customers required to return cryptocurrency could face losses. He added that the incident exposed 'structural problems' in how exchanges operate internal ledger systems. The FSS has launched a full investigation, and parliament has scheduled an emergency hearing for 11 February.
Legal experts are divided on whether recipients who sold the bitcoin could face criminal prosecution, given a 2021 Supreme Court ruling that cryptocurrency does not constitute 'property' under Korean criminal law. Bithumb is holding 'one-on-one persuasion' talks with roughly 80 customers who cashed out, asking them to voluntarily return the won equivalent, and is reportedly seeking to avoid civil lawsuits.
In an apology, Bithumb said it takes the incident 'very seriously' and will redesign the entire asset payment process and enhance internal controls. It stressed that the error was unrelated to any external hacking or security breach.
