South Korean crypto exchange Bithumb has confirmed it will fully compensate users after an operational error during a promotional airdrop on February 6 led to the accidental distribution of 620,000 Bitcoin. The mistake affected 695 users and caused Bithumb's BTC price to briefly drop to $55,000, while Bitcoin traded above $66,000 on other exchanges.
Employee Error: 2,000 KRW Reward Became 2,000 BTC Each
According to Bithumb CEO Lee Jae-won, an employee intended to distribute 2,000 KRW (about $1.5) in rewards but mistakenly credited Bitcoin instead. Each recipient received roughly 2,000 BTC. Some users immediately sold the coins, triggering panic selling.
The exchange froze accounts and halted withdrawals within 20 minutes, recovering 618,212 BTC — 99.7% of the total. The remaining 1,800 BTC were irretrievable due to rapid transfers or sales.
Compensation Plan: 110% Reimbursement and Fee Waivers
Bithumb estimates total losses from panic selling at approximately 1 billion KRW ($680,000). The firm will reimburse all affected users with 110% of their losses, provide 20,000 KRW ($15) to users active during the incident, and waive trading fees for seven days for all users.
As a long-term measure, Bithumb announced a permanent Customer Protection Fund of 100 billion KRW ($68 million) to cover future incidents.
Regulatory Scrutiny: FSC Launches Emergency Inspection
South Korea's Financial Services Commission (FSC) and Financial Supervisory Service (FSS) are reviewing the incident. FSC Vice Chairman Kwon Dae-young led an emergency on-site inspection on February 7, with officials from the Financial Intelligence Unit (FIU) present.
Bithumb confirmed it will implement system upgrades including multi-step payment approvals, enhanced asset verification, and AI-based monitoring for abnormal transactions, while coordinating closely with regulators to prevent similar errors.