South Korean cryptocurrency exchange Bithumb mistakenly sent users Bitcoin worth over $44 billion due to an operational error, triggering a plunge in the platform's coin prices, and regulators have launched a review process.
The incident occurred on Friday. Bithumb originally intended to distribute a cash promotion reward of 2,000 won (approximately $1.4) per user, but a system error resulted in at least 2,000 Bitcoin being sent to each of 695 users. The exchange restricted trading and withdrawal functions for the affected accounts within 35 minutes, and has since recovered 99.7% of the erroneously sent Bitcoin.
The incident directly impacted market confidence. The price of Bitcoin on the Bithumb platform plummeted by 17% to 81.1 million won on Friday evening before recovering somewhat; the latest trading price is 104.5 million won.
After holding an emergency meeting, the Financial Services Commission and other regulatory agencies stated that this event "exposed the fragility and risks of virtual assets". They will conduct a review of Bithumb's and other cryptocurrency exchanges' internal control systems, asset holdings, and operational status. If any violations are found, on-site inspections will be initiated.
According to a Reuters report, Bithumb attributed the incident to an internal operational error. The exchange emphasized in a statement: "We want to make it clear that this incident is unrelated to external hacking or security breaches. There are no issues with system security or customer asset management."
Calculated at the current Bitcoin price, Bithumb erroneously distributed a total of 620,000 Bitcoin, worth approximately $44 billion. The promotional activity was originally designed to distribute a small cash reward of no less than 2,000 won to each user, but the system mistakenly replaced the numerical unit from won to Bitcoin during execution, causing the reward amount to be magnified by billions of times.
The exchange acted swiftly upon discovering the error, freezing the trading and withdrawal permissions of the affected accounts within 35 minutes. As of now, 99.7% of the wrongly sent Bitcoin has been recovered, but approximately 0.3% remains unrecovered, proportionally worth about $132 million.
South Korean financial regulators responded quickly to this incident. The Financial Services Commission, following an emergency meeting, issued a statement noting that this event reveals systemic risks present in the virtual asset industry.
Regulators plan to conduct a comprehensive review of cryptocurrency exchanges' internal control systems, virtual asset holdings, and operational processes. If violations or management loopholes are discovered during the review, on-site inspection procedures will be initiated immediately. This signals a potential further increase in the intensity of South Korea's regulation of the cryptocurrency industry.
Bithumb is South Korea's second-largest cryptocurrency exchange,仅次于 market leader Upbit. This incident may prompt regulators to reassess risk management standards and technical system reliability requirements across the entire industry.
