South Korean crypto exchange error sends billions in bitcoin: Regulators step in

Bithumb, one of South Korea’s largest cryptocurrency exchanges, mistakenly sent out a huge amount of Bitcoin during a routine rewards distribution. The company had planned to credit users with 2,000 won (about $1.37) as part of a regular incentive program, but due to an internal system error, the platform instead credited 2,000 Bitcoin to each eligible account. As a result, about 620,000 Bitcoin were transferred in total. At market value, the mistaken payout was worth more than $40 billion. The mistake was discovered within minutes. Bithumb said the issue came from a miscalculation during the rewards process and was not linked to any external system failure.

The error affected 695 users, many of whom briefly appeared to be multi-millionaires based on their account balances. Some users reportedly logged in to find sudden and unexpected wealth displayed on their screens. Bithumb moved quickly to limit the damage. Trading and withdrawals were frozen within 35 minutes of the discovery. This action stopped most of the funds from being moved out of the platform. According to the exchange, about 99.7% of the wrongly sent Bitcoin was recovered shortly after. The company did not disclose whether any users were able to withdraw funds before the freeze.

Following the incident, Bithumb said clearly that the error was not caused by hacking or a security breach. The company stated that its systems were not compromised and that customer assets remained safe. In a statement, Bithumb said the issue was an internal operational mistake and not a failure of its security infrastructure.

South Korea’s Financial Supervisory Service took notice of the incident and held an emergency meeting. The regulator said it would review the case and start a formal investigation if any illegal activity or rule violations were found. To address user concerns, Bithumb announced compensation for all users who were active on the platform at the time. The exchange will pay 20,000 won, about $13.66, to eligible users and waive certain trading fees. Chief executive Lee Jae-won said the company would focus more on customer trust going forward. Bithumb also plans to improve its verification systems and introduce artificial intelligence tools to detect unusual transactions early.