Bithumb’s $40 Billion Cryptocurrency Blunder: A Major Error in Promotional Event Sparks Legal and Financial Fallout

South Korea’s Bithumb Faces $40 Billion Crypto Crisis After Major Error

Seoul, South Korea — In a shocking turn of events, Bithumb, South Korea’s second-largest cryptocurrency exchange, is racing against time to recover over $40 billion in cryptocurrency mistakenly credited to customers during a promotional event last week. The blunder occurred on February 6 when an employee accidentally entered prize amounts in bitcoins instead of Korean won, leading to the erroneous distribution of a staggering 620,000 bitcoins—equivalent to approximately $42 billion.

The promotional event, designed to reward 695 qualifying customers with a total of 620,000 won (around $423), spiraled into chaos as 249 participants opened their prize boxes, receiving amounts that far exceeded what Bithumb actually holds. The exchange has since managed to reverse 99.7% of the erroneous credits, but approximately 13 billion won ($9 million) remains unrecovered, as some recipients quickly sold or withdrew their newfound wealth before the error was detected.

Lee Chan-jin, governor of South Korea’s Financial Supervisory Service (FSS), described the incident as “catastrophic” for those who sold the mistakenly credited bitcoins. With bitcoin prices on the rise since the error, customers who may be required to return the cryptocurrency could face significant financial losses. Lee emphasized that the incident highlights “structural problems” in the internal operations of cryptocurrency exchanges.

Legal experts are divided on the potential ramifications for recipients who sold their mistakenly credited bitcoins. A 2021 Supreme Court ruling stated that cryptocurrency does not qualify as “property” under Korean criminal law, leaving the door open for various interpretations regarding possible criminal prosecution.

Bithumb has initiated “one-on-one persuasion” talks with around 80 customers who cashed out, urging them to voluntarily return the equivalent in won. The exchange aims to avoid civil lawsuits, which could compel courts to order the return of the original asset rather than its cash equivalent.

The FSS has escalated its response, launching a full investigation into the incident, while South Korea’s parliament has scheduled an emergency hearing for February 11 to question both Bithumb and financial authorities about the blunder.

In a public apology, Bithumb stated, “We take this incident very seriously and will do our utmost to prevent recurrence by redesigning the entire asset payment process and enhancing the internal control system.” The exchange reassured customers that the incident was not related to any external hacking or security breach, emphasizing that system security and customer asset management remain intact.

As Bithumb navigates this unprecedented crisis, the fallout from this monumental error could reshape the landscape of cryptocurrency exchanges in South Korea and beyond.