South Korea’s second-largest cryptocurrency exchange, Bithumb, is currently working to recover an extraordinary amount of cryptocurrency—over $40 billion—after a significant error during a promotional event. The incident occurred on February 6 when a Bithumb employee mistakenly credited customers with 620,000 bitcoins instead of the intended 620,000 won (approximately $423) to 695 qualifying participants.
The promotional event was designed as a “random box” giveaway, but due to the clerical error, a total of 620,000 bitcoins, valued at around $42 billion, was sent out. Out of those who participated, 249 customers accessed their prize boxes, resulting in them receiving amounts equivalent to 14 times what Bithumb actually holds in total bitcoin.
Lee Chan-jin, the governor of South Korea’s Financial Supervisory Service (FSS), described the situation as “catastrophic,” particularly for those customers who sold or utilized the bitcoins before the error was identified. Given the subsequent rise in bitcoin prices since the incident, any customers now asked to return the cryptocurrency may incur financial losses. Lee also noted that this event highlighted “structural problems” within the operational processes of cryptocurrency exchanges.
Legal professionals have expressed varied opinions regarding the potential liability of recipients who sold the erroneously credited bitcoins. This debate is sparked by a 2021 supreme court ruling which establishes that cryptocurrency does not constitute “property” under Korean criminal law. The implications of this ruling could complicate any prosecution efforts in the aftermath of the incident.
Bithumb stated that it has managed to correct 99.7% of the unintended credits through adjustments in its internal ledger system and has issued a public apology for the error. However, authorities have indicated that 86 customers sold approximately 1,788 bitcoins within a mere 35 minutes before the exchange intervened and froze the affected accounts. Some of these funds were withdrawn to personal bank accounts, while others were reinvested into various cryptocurrencies.
Currently, Bithumb is in discussions with about 80 customers who cashed out, engaging in what it calls “one-on-one persuasion” with the aim of negotiating the voluntary return of the won equivalent of the mistakenly credited amounts. The exchange is reportedly taking measures to prevent civil lawsuits—where courts could mandate the return of the original asset rather than a cash equivalent—as part of its recovery strategy.
In response to the incident, the FSS has launched a comprehensive investigation, and an emergency parliamentary hearing has been scheduled for February 11. This hearing will focus on Bithumb’s actions and the role of the financial authorities in the matter.
Bithumb has emphasized that the incident was not related to any hacking activities or security breaches and does not reflect ongoing issues with system security or customer asset management. The exchange pledged to meticulously redesign both its asset payment processes and internal control systems to safeguard against future occurrences.
