South Korean cryptocurrency exchange Bithumb said on Saturday that it accidentally distributed more than 620,000 bitcoins to customers during a promotional event. This error briefly caused chaos on the platform and triggered a sharp selloff.
The mistakenly distributed bitcoin was worth around 44 billion dollars at current market prices.
The exchange said the incident happened on Friday when it was running a promotion that was supposed to give users small cash rewards starting from 2,000 Korean won, or about 1.40 dollars. Instead of receiving cash, some customers were given at least 2,000 bitcoins each, according to local media reports. The error affected 695 users before the company identified the issue.
Bithumb said it acted quickly after discovering the mistake and restricted trading and withdrawals for the affected accounts within 35 minutes. The company added that it has since recovered 99.7 percent of the distributed bitcoin and apologized to users for the disruption caused by the incident.
In a statement, Bithumb stressed that the issue was not caused by hacking or a security breach. The exchange said there were no problems with system security or customer asset management, describing the incident as an internal operational error rather than an external attack.
Despite the reassurance, South Korean financial regulators reacted strongly. Authorities, including the Financial Services Commission, said the incident exposed serious risks and weaknesses in the virtual asset industry. Following an emergency meeting, regulators said they would closely review Bithumb’s internal control systems and could launch on-site inspections of the exchange and other crypto platforms if further irregularities are found in their operations or asset management practices.
The market impact was immediate. Bitcoin prices on Bithumb briefly fell by about 17 percent on Friday evening, dropping to around 81.1 million won, according to exchange data. Prices later recovered and were last trading near 104.5 million won.
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Bithumb is one of South Korea’s largest cryptocurrency exchanges but remains behind Upbit, which is currently the dominant player in the country’s digital asset market. The incident is expected to fuel further scrutiny of crypto exchanges in South Korea as regulators continue tightening oversight of the sector.
