Bithumb’s $40B Bitcoin Mistake: 620,000 BTC Accidentally Credited

• Bithumb accidentally credited 620,000 BTC (~$40B) to users during a promo error.
• The plan was to give each user a small cash reward as part of the promotional campaign.
• The regulators have now set up a dedicated task force to check Bithumb and other exchanges.

The South Korean crypto exchange Bithumb accidentally gave users about 620,000 Bitcoin worth over $40 billion, due to an error while running a customer promotion.

The plan was to give each user a small cash reward of about $1.40 (approximately 2000 won) as part of the promotional campaign. However, due to the data entry error, it caused the exchange to hand out Bitcoin instead of won.

Around 695 users initially found thousands of Bitcoin mistakenly added to their accounts. Bithumb detected the problem within roughly half an hour and froze trading and withdrawals for the affected accounts. Immediately after, the exchange started taking the incorrectly credited Bitcoin back.

Interestingly, the price of Bitcoin on Bithumb briefly fell as some users started selling the Bitcoin they received by mistake. Still, prices bounced back close to the global average after the exchange locked down the accounts.

A few users managed to sell or take out some of the Bitcoin before the freeze, making it harder for the exchange to recover all the funds.

Bithumb reported that it recovered about 99.7% of the 620,000 BTC by reversing the transactions and freezing accounts. For the BTC that were sold before the freeze, the exchange got back over 90% of the assets. 

Nonetheless, approximately 125 BTC (worth roughly 10 to 13 billion Korean Won) are still missing because some users withdrew them or traded them on other exchanges. At the moment, the officials are contacting those users to get the funds back, since they are legally required to return mistaken gains. 

Bithumb has stated that the incident was not due to hacking or external security breaches.

Reaction from South Korea’s Regulator

The mistake has started official investigations and calls for tighter rules from Korean financial watchdogs. 

Namely, the country’s main financial regulators, the FSS and FSC, said that the error shows there are serious problems with how crypto exchanges manage their systems and track funds. They warned that these “ghost coins” (Bitcoin amounts recorded on exchange ledgers but never actually held) are a big hurdle to treating crypto like normal finance. 

The authorities have now set up a dedicated task force to urgently check Bithumb and other exchanges, looking at their internal controls and how they manage risks.

Related: Crypto Crackdown: South Korea Announces Market Manipulation Investigation