Bithumb mistakenly distributed more than $40 billion worth of Bitcoin to some users due to an employee error, leading to a brief but sharp selloff on its platform.
The exchange will reimburse customers who made losses when they sold their holdings in a panic, with Chief Executive Officer Lee Jae-won saying some customers will be reimbursed their full loss spread and awarded an additional 10% bonus.
Bithumb estimated customer losses to be around 1 billion won as of Saturday and will use its corporate assets to cover any shortfall to ensure customer balances are restored.
South Korean crypto exchange Bithumb, which mistakenly distributed more than $40 billion worth of Bitcoin on Friday, said it will reimburse customers who made losses when they sold their holdings in a panic during a brief but sharp selloff on its platform.
Bithumb had intended to award 620,000 won ($424) to winners of a promotion, but an employee keyed in Bitcoin instead of the Korean currency, Yonhap News reported, citing people it didn’t identify. The error led to the distribution of 620,000 Bitcoin to 695 users at 7 p.m. local time Friday, a mistake that was identified within 20 minutes, the exchange said.
“An abnormal amount of Bitcoin was mistakenly distributed to some users,” the exchange said in a statement. “As some of the accounts proceeded to sell the credited Bitcoin, the Bitcoin price experienced a brief yet sharp fluctuation.”
On Bithumb, prices on Friday evening briefly dropped 17% from around 98.29 million won, or $67,188, to 81.1 million won, or around $55,400. Trading volume soared, charts from the exchange showed.
Bithumb started halting trading and withdrawals for the credited accounts at 7:35 p.m. and fully blocked it by 7:40 p.m., it said. The exchange managed to retrieve 99.7% of the distributed coins.
Chief Executive Officer Lee Jae-won said some customers who were effectively pushed into “panic‑selling” during the brief window the error occurred will be reimbursed their full loss spread and be awarded an additional 10% bonus.
“We offer our deepest apologies for the confusion and inconvenience,” Lee said in a statement on Saturday. “We acknowledge, with a deep sense of responsibility, that we failed to uphold the two core values that define a virtual‑asset exchange stability and integrity.”
As of 4 p.m. Saturday, the company estimated customer losses to be around 1 billion won. Bithumb will use its corporate assets to cover any shortfall to ensure customer balances are restored, it said.
The Financial Services Commission said it convened an emergency inspection meeting on Saturday, joined by other regulators.
Cryptocurrencies have been on shaky ground ever since a brutal series of liquidations in October that sapped market confidence. The selling picked up steam this week in line with the unwinding of leveraged bets and broader market turbulence.
Bitcoin rose as much as 13% to $71,469 on Friday. Earlier in the session, it came close to falling below $60,000 for the first time since October 2024. The token was trading at around $68,000 on Saturday.