South Korea’s major cryptocurrency exchange, Bithumb, admitted on Saturday (February 7) that due to an employee’s operational mistake, the platform accidentally distributed about $4.4 billion worth of Bitcoin to users. This shocking blunder caused panic selling within the platform, leading to a sudden 17% drop in the price of Bitcoin.
According to international reports, the incident originated from a promotional activity on Friday night. Bithumb had originally planned to distribute small rewards of 620,000 South Korean Won (approximately $424) to winning users, but an employee mistakenly entered Bitcoin as the currency unit instead.
This error resulted in 620,000 Bitcoin being distributed to 695 users that night. Bithumb discovered the mistake within 20 minutes and began blocking related accounts at 7:35 pm. Despite the swift response, the influx of this astronomical asset has caused a market upheaval, with the price of Bitcoin on the platform plummeting from around 98.29 million South Korean Won (approximately $67,200) to 81.1 million South Korean Won (approximately $55,400).
Bithumb stated on Saturday that they have successfully recovered 99.7% of the misallocated tokens. In response to customers who suffered losses due to the drastic price fluctuations, CEO Lee Jae-won announced a generous compensation plan: for users who incurred losses due to “panic selling,” the company will make up for the full price difference and provide an additional 10% compensation.
“We deeply regret our failure to uphold the core values of virtual asset exchanges – stability and integrity,” Lee Jae-won apologized in a statement. The company initially estimated customer losses at around 1 billion South Korean Won (approximately $683,000) and will utilize company-owned assets for advance payments to ensure customers’ account balances return to normal.
Although Bithumb emphasized that this incident was not related to external hacking, the South Korean financial regulatory authority swiftly intervened. The Financial Services Commission held an emergency meeting on Saturday, stating that the event “exposed the vulnerability of virtual asset systems.” Regulatory authorities mentioned that if they find any irregularities in internal controls during subsequent reviews, they will conduct on-site inspections of Bithumb and other exchanges.
Currently, the price of Bitcoin on the Bithumb platform has rebounded to around 104.5 million South Korean Won (approximately $71,400). In the South Korean market, Bithumb’s market share currently ranks second only to the leading exchange, Upbit.