South Korean cryptocurrency exchange Bithumb has announced it will fully compensate customers who suffered losses after a major internal error triggered panic selling last week.
According to Yonhap News Agency, the incident occurred on Friday evening when Bithumb mistakenly transferred 620,000 bitcoins to 249 users who were taking part in a promotional event. The mistake happened because an employee entered the payment unit as “BTC” instead of Korean won.
Each affected user received an average of around 2,490 bitcoins, worth approximately 244 billion won, or about $166 million at the time. Some users quickly sold the unexpected bitcoin deposits, leading to a sudden and sharp drop in bitcoin prices on the exchange.
Bithumb said it has decided to fully reimburse customers who lost money due to panic selling. In addition to covering the full price difference, the company will also provide an extra 10 percent compensation as a goodwill measure. The exchange will also waive all trading fees on listed assets for one week, starting at midnight on Monday.
The company stated that it activated a companywide crisis management system led by senior executives and formed a special task force to handle investor losses and stabilize operations. Bithumb added that it managed to recover 618,212 of the mistakenly transferred bitcoins and later recouped about 93 percent of the 1,788 bitcoins that users had sold. However, 125 bitcoins have not yet been recovered.
Trading and withdrawals from the affected accounts were halted at 7:40 p.m. on the day of the incident, but the brief delay allowed some transactions to go through at unfavorable prices. Bithumb estimates total customer losses from the error at around 1 billion won.
Bithumb CEO Lee Jae-won issued a public apology, saying he would take full responsibility for the incident and ensure stronger safeguards are put in place to prevent similar mistakes in the future.
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South Korea’s financial watchdog, the Financial Supervisory Service, has confirmed it will review Bithumb’s response to the incident, including user protection measures and whether the remaining bitcoins can be fully recovered.
