South Korean cryptocurrency exchange Bithumb has admitted it mistakenly distributed over $40 billion worth of bitcoins to customers as part of a promotional campaign, sparking a sudden selloff on the platform.
The error occurred on Friday, when the exchange intended to give users small cash rewards of 2,000 Korean won (around $1.40). Instead, each winning account received at least 2,000 bitcoins. Bithumb quickly restricted trading and withdrawals for the 695 affected accounts within 35 minutes and later confirmed it had recovered 99.7% of the 620,000 bitcoins, valued at roughly $44 billion at current market rates.
In a statement, Bithumb stressed that the incident was not caused by hacking or security failures and affirmed that customer funds and system integrity remained intact.
South Korea’s financial regulators, including the Financial Services Commission, said the episode highlighted the risks and vulnerabilities inherent in virtual asset platforms. Following an emergency meeting, they announced plans for on-site inspections of Bithumb and other cryptocurrency exchanges, reviewing internal controls, holdings, and operational practices to prevent similar incidents in the future.
