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Bithumb has apologised for staff error that sent customers 620,000 bitcoins instead of 620,000 Korean won, equivalent to a few hundred US dollars.
South Korea’s second-largest cryptocurrency exchange is scrambling to recover more than $40bn of cryptocurrency after accidentally crediting customers with 620,000 bitcoins during a promotional event last week.
Bithumb said it had corrected most of the mistaken credits, but that about 13bn won ($9m) remained unrecovered after some recipients sold or withdrew the funds before the error was detected.
The mistake occurred on 6 February, when an employee entered prize amounts in bitcoin rather than Korean won during a “random box” promotional event. The plan had been to send a total of 620,000 won ($423) in prizes to 695 qualifying customers, but the employee instead sent 620,000 bitcoins ($42bn). Of those eligible, 249 opened their prize boxes and received their reward, equivalent to roughly 14 times more bitcoin than the exchange owns.
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Lee Chan-jin, governor of South Korea’s Financial Supervisory Service (FSS), called it “catastrophic” for those who sold the bitcoin they received. Bitcoin prices have risen since Friday, meaning any customers required to return cryptocurrency could face losses. Lee added that the incident exposed “structural problems” in how exchanges operate internal ledger systems.
Separately, legal experts are divided on whether recipients who sold what they received could face criminal prosecution, given a 2021 supreme court ruling that cryptocurrency does not constitute “property” under Korean criminal law.
Bithumb said it corrected 99.7% of the erroneous credits by reversing internal ledger entries and issued an apology. However, 86 customers sold about 1,788 bitcoins in the 35 minutes before the exchange froze the affected accounts, financial authorities said, triggering a brief price drop on its platform. Some had been withdrawn to personal bank accounts, and some was used to buy other cryptocurrencies, according to local media.
The exchange is now holding what it described as “one-on-one persuasion” talks with roughly 80 customers who cashed out, asking them to return the won equivalent voluntarily.
It is reportedly seeking to avoid civil lawsuits, where courts could, under civil law, order the return of the original asset rather than its cash equivalent.
The FSS escalated its response to a full investigation, while the country’s parliament has scheduled an emergency hearing for 11 February to question both the exchange and financial authorities.
Bithumb said in its apology: “Bithumb takes this incident very seriously and will do its utmost to prevent recurrence by redesigning the entire asset payment process and enhancing the internal control system.
“We want to make it clear that this incident is unrelated to any external hacking or security breach, and does not pose any issues with system security or customer asset management.
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The Vietnamese government has finally made the decision to embrace cryptocurrency. A five-year pilot program has been approved, aimed at establishing a regulated digital asset trading platform.
Vietnam's second-largest private bank, VPBank, took the lead by involving its securities department in this project. Even more noteworthy is that they have brought in South Korean exchange giant Upbit as a partner. This union of a local financial institution with an internationally mature platform showcases Vietnam's pragmatic attitude. The government has set quite high thresholds, requiring participating companies to have a minimum registered capital of at least $68 million. This is clearly aimed at keeping speculative players out and only allowing truly capable players to enter the market.
In addition to VPBank, leading institutions such as SSI Securities and TCBS are also gearing up and have successively established digital asset subsidiaries. MB Bank is also actively seeking international partners. The enthusiasm of young people in Vietnam for cryptocurrency is the fundamental driving force behind all of this.