Massive Bitcoin Payout Error at South Korean Exchange
A South Korean cryptocurrency exchange inadvertently distributed over $40 billion (£32 billion) worth of bitcoin to its customers, temporarily turning them into multi-millionaires.
The exchange, Bithumb, had intended to reward customers with a small cash bonus of 2,000 won (approximately $1.37), but instead mistakenly transferred 2,000 bitcoins on Friday.
Immediate Response and Recovery Efforts
Bithumb issued an apology for the error and stated that it quickly identified the mistake, successfully recovering nearly all of the erroneously sent tokens.
The company restricted trading and withdrawals for the 695 affected customers within 35 minutes of the incident.
According to Bithumb, 99.7% of the 620,000 bitcoins mistakenly sent were recovered.
Company Statement on Security
Bithumb emphasized that the incident was not related to any external hacking or security breaches, assuring that there were no issues with system security or management of customer assets.
"We want to make it clear that this matter has nothing to do with external hacking or security breaches, and there is no problem with system security or customer asset management," Bithumb said in a statement on Friday.
Regulatory Review and Company Commitment
Following the incident, South Korea's financial regulator convened an emergency meeting on Saturday to examine the situation. The Financial Supervisory Service (FSS) indicated that any evidence of illegal activity would trigger formal investigations.
Bithumb pledged full cooperation with regulatory authorities. CEO Lee Jae-won stated:
"[We] will take this accident as a lesson and prioritise 'customer trust and peace of mind' rather than external growth,"
The company announced plans to compensate all users active on the platform at the time with 20,000 won ($13.66) and to waive trading fees, among other measures.
Future Measures and Industry Implications
Bithumb revealed intentions to enhance verification systems and implement artificial intelligence to detect abnormal transactions.
This incident is expected to prompt discussions about strengthening regulatory controls within the financial sector.
Similar Past Incident
In a comparable case in April 2024, Citigroup, a US bank, mistakenly credited $81 trillion instead of $280 to a customer's account. Two employees failed to detect the error before processing, but the bank reversed the transaction within hours after a third employee identified the mistake, according to the Financial Times.
