A recent operational mishap at the South Korean cryptocurrency exchange Bithumb resulted in the erroneous distribution of a staggering $40 billion worth of Bitcoin. This incident, caused by a simple data entry error where an employee mistakenly allocated Bitcoin instead of the Korean won to promotional winners, triggered a rapid and sharp decline in Bitcoin's value on the platform. In response to the market volatility and subsequent panic selling, Bithumb has swiftly announced a comprehensive compensation plan, pledging to fully reimburse affected customers for their losses and offer an additional bonus, demonstrating a commitment to restoring user trust and market stability.
South Korean Crypto Exchange Addresses Massive Bitcoin Distribution Error
On Friday, February 7, 2026, at precisely 7 p.m. local time, South Korean cryptocurrency exchange Bithumb experienced an unprecedented system error that led to the accidental distribution of approximately 620,000 Bitcoins, valued at an astounding $40 billion, to 695 users. This colossal misstep occurred when an employee intended to credit promotional winners with 620,000 Korean won ($424) but mistakenly entered Bitcoin as the currency. The error was identified and addressed within a mere 20 minutes, during which Bithumb observed a dramatic 17% plunge in Bitcoin's price on its platform, from roughly 98.29 million won ($67,188) to 81.1 million won ($55,400), accompanied by a surge in trading volume as panic selling ensued.
Bithumb's swift response involved halting trading and withdrawals for the affected accounts by 7:35 p.m. and implementing a full block by 7:40 p.m. The exchange successfully retrieved an impressive 99.7% of the mistakenly distributed digital assets. In a statement released on Saturday, CEO Lee Jae-won extended profound apologies for the confusion and inconvenience caused. He affirmed the company's deep sense of responsibility, acknowledging a failure to uphold the crucial values of stability and integrity expected from a virtual-asset exchange. Bithumb has committed to fully compensating customers who experienced losses due to panic selling during the brief market fluctuation, including an additional 10% bonus. As of Saturday afternoon, estimated customer losses totaled around 1 billion won. The exchange announced it would utilize its corporate assets to cover any shortfalls, ensuring all customer balances are restored. In response to the incident, the Financial Services Commission convened an emergency inspection meeting with other regulatory bodies to assess the situation.
This incident at Bithumb serves as a poignant reminder of the inherent vulnerabilities within the rapidly evolving cryptocurrency market. It underscores the critical importance of robust internal controls, rigorous system testing, and stringent oversight to prevent human errors from cascading into potentially catastrophic financial events. For cryptocurrency exchanges, maintaining not just technical stability but also unwavering integrity is paramount to fostering user trust and ensuring the long-term viability of the digital asset ecosystem. The swift and decisive action taken by Bithumb to reimburse affected users sets a positive precedent for accountability in the industry, highlighting the necessity for platforms to prioritize customer protection even in the face of significant operational challenges. This event should prompt all market participants and regulators to re-evaluate existing safeguards and implement even more resilient measures to mitigate risks and protect investors in this dynamic financial landscape.