South Korea's second-largest cryptocurrency exchange, Bithumb, is racing to recover more than $40bn (£33bn) in bitcoin after a staff error saw it accidentally credit customers with 620,000 bitcoins instead of 620,000 Korean won during a promotional event.
The mistake occurred on 6 February when an employee entered prize amounts in bitcoin rather than won during a 'random box' promotion. The plan was to send a total of 620,000 won ($423) to 695 qualifying customers, but instead, 620,000 bitcoins ($42bn) were sent. Of those eligible, 249 customers opened their prize boxes and received rewards equivalent to roughly 14 times more bitcoin than the exchange owns.
Bithumb said it had corrected 99.7% of the erroneous credits by reversing internal ledger entries and issued an apology. However, about 13bn won ($9m) remained unrecovered after some recipients sold or withdrew the funds before the error was detected. Financial authorities said 86 customers sold about 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), called the incident 'catastrophic' for those who sold the bitcoin, as prices have since risen. He added that it exposed 'structural problems' in how exchanges operate internal ledger systems. Legal experts are divided on whether recipients who sold could face criminal prosecution, given a 2021 supreme court ruling that cryptocurrency does not constitute 'property' under Korean criminal law.
Bithumb is now holding 'one-on-one persuasion' talks with roughly 80 customers who cashed out, asking them to voluntarily return the won equivalent. It 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 parliament has scheduled an emergency hearing for 11 February.
