A significant error occurred at the South Korean cryptocurrency exchange Bithumb, leading to the accidental distribution of over $40 billion worth of bitcoin to certain users. This incident, which unfolded on Friday, resulted in a temporary selloff as customers reacted to the unexpected influx of funds.
Bithumb confirmed that it mistakenly sent 620,000 bitcoins, a value exceeding $40 billion, instead of the intended promotional amount of approximately 2,000 won (about $1.37) to each participating user. The exchange realized its mistake quickly, implementing a freeze on trading and withdrawals for the 695 users affected by the error just 35 minutes after it occurred.
In a public apology, Bithumb expressed regret for the confusion stemming from the promotional event’s distribution process. The company reassured its customers that it had successfully recovered 99.7 percent of the mistakenly sent bitcoins and would use its own resources to cover any lost amounts.
This mishap created a brief period of volatility in bitcoin prices on the exchange, with the price of the cryptocurrency dropping by as much as 17 percent to 81.1 million won late Friday. Bithumb acknowledged that the situation led to some users executing trades at unfavorable prices due to panic selling.
Following the incident, Bithumb committed to compensating affected customers by covering the price difference incurred during the panic selling and offering an additional 10 percent bonus. The exchange estimated the total losses from the incident to be around 1 billion won.
The platform also clarified that this incident was not linked to any external hacking or security breach, emphasizing that it was an internal mistake.
As bitcoin continues to face fluctuations in value, having recently experienced a decline following a surge tied to significant political events, exchanges like Bithumb are under scrutiny. The exchange’s swift response to rectify the situation and compensate its users will likely be a focal point in maintaining trust within the rapidly evolving cryptocurrency market.
