Crypto giant Bithumb is in hot water after a staff member’s keyboard slip turned a routine promo into a $43 billion nightmare. South Korea’s Financial Supervisory Service has now launched a full-scale probe, and Bithumb may sue users who refuse to return the crypto.
What exactly happened?
On Feb 6, Bithumb ran a giveaway campaign promising small cash rewards from 2,000 to 50,000 KRW. Instead, an employee input the reward unit as BTC instead of KRW. The result: 620,000 BTC worth ~$43.1 billion was mistakenly sent to hundreds of user accounts.
The error briefly crashed Bithumb’s BTC/KRW pair by 15%.
Recovery status so far
Bithumb says it has clawed back 99.7% of the wrongly distributed Bitcoin and 93% of the 1,788 BTC that users quickly sold. About 125 BTC remains unrecovered.
To calm users, Bithumb promised 110% compensation for losses tied to the price plunge and announced a 100 billion won (~$68M) user protection fund.
Legal fallout
The exchange is now contacting recipients one by one and weighing lawsuits for “unjust enrichment” if they don’t return the funds. Lawyers say Bithumb would likely win civil cases since the prizes were clearly meant to be small KRW amounts, not millions in BTC.
However, criminal liability is murky. Korea’s Supreme Court previously ruled that disposing of mistakenly transferred Bitcoin isn’t always a crime, though the 2018 Samsung Securities “ghost shares” case saw employees convicted for selling wrongly issued stock.
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Regulators step in
The FSS escalated its routine check into a full investigation, focusing on how Bithumb distributed BTC exceeding its actual reserves. Separately, the Financial Intelligence Unit has already sent Bithumb notice of a 6-month partial suspension for AML violations. The CEO also faces disciplinary action.
A sanctions review committee will decide Bithumb’s final penalty this month.
Why this matters for crypto users
1. Exchange risk: Even top exchanges can make billion-dollar coding/human errors.
2. Legal precedent: Korea may set new rules for recovering mistaken crypto transfers.
3. Market impact: Fat-finger events can trigger instant flash crashes on local pairs.
Bithumb says it’s strengthening internal controls to prevent a repeat.