South Korean cryptocurrency exchange Bithumb accidentally distributed over US$40 billion worth of bitcoins to customers. The incident occurred on Friday, during a routine promotional rewards campaign. Instead of small cash rewards, some users received at least 2,000 bitcoins each, far exceeding intended amounts.
The mistaken transfer prompted a sharp selloff on the platform, causing bitcoin prices to briefly drop 17 percent.
Prices fell to 81.1 million Korean won before recovering to 104.5 million won.
Rapid Recovery and Customer Restrictions
Bithumb swiftly acted to contain the situation. Within 35 minutes, the exchange restricted trading and withdrawals for the 695 affected customers. Officials confirmed that 99.7 percent of the 620,000 bitcoins, valued at approximately US$44 billion, were successfully recovered.
The exchange emphasized that the error was internal and unrelated to hacking or security breaches. Bithumb confirmed there were no issues with system security or customer asset management.
Promotional Error Explained
The incident originated from a promotional campaign intended to reward users with small cash amounts.
Each winner was supposed to receive 2,000 Korean won (roughly US$1.37) or more.
However, a technical error caused the distribution of thousands of bitcoins instead, generating widespread attention in cryptocurrency markets.
Bithumb issued a formal apology and clarified that the error was an isolated internal mistake. The firm stressed that systems remained secure and customer funds were not at risk.
Market and Industry Implications
The accidental bitcoin giveaway briefly disrupted local bitcoin trading. Charts show the temporary market slump, followed by rapid price stabilization. The incident also highlights risks inherent in large-scale digital asset operations, including human and technical errors.
Bithumb, while a major player in South Korea’s crypto market, still trails Upbit, the country’s dominant exchange. Experts suggest that swift recovery and communication helped prevent long-term market panic.
Lessons for Cryptocurrency Platforms
The event underscores the importance of precise operational control in cryptocurrency exchanges. Technical safeguards and immediate response plans can limit potential financial damage. Bithumb’s experience serves as a cautionary tale for other exchanges managing high-value digital assets.
The incident may also prompt regulatory scrutiny and stronger operational protocols in the crypto industry. Transparency and rapid action proved essential in maintaining user trust and stabilizing the market.
