In what may be the costliest operational blunder in crypto history, South Korean exchange Bithumb accidentally transferred approximately 620,000 bitcoins—worth roughly $44 billion—to 695 users during a promotional event on February 8. The platform had intended to hand out small cash rewards of 2,000 Korean won ($1.40) per user, but a system misconfiguration caused it to issue actual Bitcoin instead. Some recipients received at least 2,000 BTC each, triggering a sharp market selloff that sent Bitcoin price down over 5% in minutes.
From $1.40 Cash to 2,000 BTC: How the Error Unfolded
Bithumb blamed the incident on an internal parameter setting error. The reward amount unit was mistakenly set to Bitcoin instead of Korean won, and for certain users the reward was applied multiple times. After detecting the anomaly, the exchange immediately restricted trading and withdrawals, initiating an emergency recovery process. Within 35 minutes, Bithumb claims to have retrieved 99.7% of the erroneously distributed funds, though a small fraction remains unaccounted for due to rapid withdrawals or on-chain transfers by users.
No Hack, but Regulators Are Watching
Bithumb stressed that the mistake was not caused by external hacking or security breaches. Nevertheless, South Korea's Financial Supervisory Service (FSS) announced a comprehensive probe into the exchange's internal controls and risk management systems. On-site inspections of Bithumb and other major domestic crypto platforms are planned to identify similar vulnerabilities. The exchange has pledged full cooperation and said it will upgrade its risk control framework to prevent recurrence.
Market Turmoil and User Backlash
The sudden distribution of such a massive amount of Bitcoin triggered immediate selling pressure, with BTC price briefly plunging. While most industry observers agreed that Bithumb's quick freeze-and-recover actions were necessary to protect the platform and other customers, some affected users criticized the move as a violation of their trading rights. The incident has reignited debate over exchange accountability and operational safeguards. Trading has largely resumed, but withdrawal restrictions remain in place. The FSS is expected to release a preliminary report within 30 days, which may include fines or mandatory internal control reforms for Bithumb.