A South Korean cryptocurrency exchange has apologized after mistakenly distributing more than $40 billion worth of bitcoin to customers, triggering panic trading and renewed scrutiny from financial regulators.
Bithumb said the error happened on Friday during what was meant to be a routine promotional event. Instead of handing out small cash rewards, the exchange accidentally transferred hundreds of thousands of bitcoins to a limited number of users.
According to the company, 620,000 bitcoins — worth around $44 billion at current prices — were wrongly sent out as promotional rewards. The mistake affected 695 customers, prompting Bithumb to halt trading and withdrawals for those accounts within 35 minutes of the incident.
Promotional reward turns into billion-dollar mistake
The exchange had planned to give users small incentives of 2,000 Korean won (about $1.40) or more as part of the promotion. However, media reports said eligible users instead received at least 2,000 bitcoins each, a staggering error that sent shockwaves through the platform.
Bithumb said it managed to recover 99.7% of the mistakenly distributed bitcoin shortly after discovering the problem.
In a statement, the company stressed that the incident was not caused by hacking or a security breach.
“We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management,” Bithumb said.
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Bitcoin price briefly plunges
The mistake caused immediate disruption on the exchange. Bitcoin prices on Bithumb briefly dropped 17%, falling to 81.1 million won on Friday evening before rebounding. Prices later recovered to around 104.5 million won, according to charts from the platform.
Regulators step in
South Korea’s financial regulators reacted swiftly. The Financial Services Commission said the incident had highlighted the risks and vulnerabilities of virtual assets.
Following an emergency meeting, regulators announced plans to conduct on-site inspections of Bithumb and potentially other cryptocurrency exchanges if issues are found in reviews of internal controls, asset holdings, or operational systems.
Bithumb is one of South Korea’s major cryptocurrency exchanges but trails Upbit, which remains the country’s dominant player in the crypto market.
