In a striking episode of Bitcoin market news, South Korea’s second‑largest cryptocurrency exchange, Bithumb, announced that a major system error led to the mistaken crediting of more than $40 billion worth of Bitcoin to customer accounts during a recent promotional event. The incident has drawn intense scrutiny over internal controls and risk management practices at digital asset platforms.
The error occurred on February 6 when Bithumb intended to distribute small cash rewards about 620,000 won (roughly $426) to a group of users. Instead, due to a configuration mistake where Bitcoin was entered instead of Korean won, the system erroneously credited 620,000 BTC (valued at more than $40 billion at the time) to affected accounts.
Bithumb’s chief executive, Lee Jae‑won, told lawmakers that the glitch was the result of flaws in the exchange’s internal verification systems. Those systems failed to check whether the outgoing asset volume matched actual holdings before allowing the transaction to proceed. At the time of the error, the platform’s real Bitcoin holdings were only a fraction of the amount mistakenly credited.
The accidental credits immediately prompted some users to sell the inflated balances, triggering a temporary plunge of about 17% in Bitcoin prices on Bithumb’s trading pair before trading was frozen. The exchange blocked trading and withdrawals for roughly 695 accounts involved in the incident within 35 minutes and has since recovered around 99.7% of the mistakenly credited Bitcoin. Regulators have said users who sold coins before the freeze are legally obligated to return the assets.
The episode has sparked concern among lawmakers and financial authorities in South Korea, where cryptocurrency regulation is evolving but not yet fully aligned with oversight frameworks applied to traditional financial institutions. Officials have called for stronger real‑time reserve checks and more robust internal controls for exchanges operating large‑volume digital asset markets.
Bithumb has acknowledged the error was not due to external hacking or security breaches and has pledged to review and strengthen its internal processes to avoid similar incidents in the future. Industry observers say the event highlights broader risks in the crypto sector related to system design, compliance, and operational safeguards in platforms handling high‑value digital asset transfers.
