South Korea’s cryptocurrency market was rocked by a shocking blunder on February 6, 2026, when Bithumb, the country’s second-largest crypto exchange, mistakenly distributed 620,000 Bitcoins—worth an eye-watering 61 to 62 trillion won (about US$44 billion)—to 249 users during a promotional event. The incident, which stemmed from a simple input error, has triggered widespread debate about the safety, transparency, and regulatory oversight of virtual asset exchanges, with both local and global observers voicing concern.
The fiasco began innocuously enough. Bithumb, seeking to reward participants in a “random box” promotional event, intended to pay out a total of 620,000 won to 249 winners. Each winner was supposed to receive between 2,000 and 50,000 won. But a staff member accidentally entered “Bitcoin (BTC)” instead of “won (KRW)” as the payment unit. As a result, 620,000 Bitcoins—about 15 times Bithumb’s actual holdings—were credited to user accounts instead of the intended cash prize, according to The Asia Business Daily and Donga Ilbo.
The scale of the error was unprecedented. At the time, Bitcoin was trading at roughly 98 to 100 million won per coin. This meant the erroneous payout was worth more than the combined holdings of many major exchanges worldwide. Internet users, especially on global forums like Reddit, reacted with disbelief. Some joked about wishing such a “lucky mistake” would happen to them, while others raised serious concerns about the reliability of crypto exchanges. “Are you sure 2,000 coins were not split among hundreds of people, but that hundreds of people each received 2,000?” wondered one Reddit user, reflecting the confusion and astonishment that swept through the online community.
Within minutes of the mistaken distribution, chaos erupted in the market. Some recipients, realizing their windfall, rushed to sell the phantom Bitcoins or used them to purchase other cryptocurrencies. The sudden flood of nonexistent assets triggered a flash crash: Bitcoin’s price on Bithumb plummeted from around 98-100 million won to as low as 80 million won—about a 16-17% drop—while prices on other exchanges remained steady. This rapid decline caused significant losses for unsuspecting traders who were caught in the crossfire, as reported by ajunews.com and Hankyoreh.
Bithumb’s response, though swift, could not prevent all the damage. The company identified the error within 20 to 35 minutes and immediately suspended trading and withdrawals from the affected accounts. By then, however, some 1,788 Bitcoins had already been disposed of by winners. In a statement, Bithumb pledged to compensate users for losses incurred from the price plunge, seeking to reassure both its customers and the wider market.
Recovery efforts were largely successful, with Bithumb managing to reclaim 99.7% of the mistakenly issued assets—618,212 Bitcoins. Of the 1,788 Bitcoins sold on the open market, 93% (1,663 Bitcoins) were recovered in cash, while the remaining 125 Bitcoins, valued at about 12.3 billion won, are believed to have been withdrawn as cash or used to buy other cryptocurrencies, according to Donga Ilbo.
The incident did not go unnoticed by regulators. On February 8, the Financial Services Commission (FSC) convened an emergency inspection meeting, chaired by Vice Chairman Lee Eok-won and attended by the Korea Financial Intelligence Unit (FIU) and the Financial Supervisory Service (FSS). Vice Chairman Lee did not mince words: “This incident has exposed structural vulnerabilities in the internal control systems of virtual asset exchanges,” he said, ordering a comprehensive review of internal controls not just at Bithumb, but across all domestic exchanges. The FSS Governor Lee Chan-jin echoed this stern stance, promising robust action in response to the debacle.
Industry experts and academics have been quick to highlight the deeper systemic issues revealed by the Bithumb blunder. “The root of this latest ordeal with Bithumb is a lack of ledger management and internal control systems,” said Kim Kab-lae, a research fellow at the Korea Capital Market Institute, in Hankyoreh. He called for automatic systems that check actual holdings at every transaction point and block payments or trades that exceed those amounts. Lee Jung-soo, a professor at Seoul National University specializing in financial law, noted that unlike traditional capital markets—where brokerages, exchanges, and depositories act as checks and balances—crypto exchanges often serve as a one-stop shop, making them more insulated from external oversight. “There needs to be rigorous verification and oversight into whether exchanges actually hold the assets they say they do,” Lee argued.
The structural vulnerabilities aren’t unique to Bithumb or South Korea. Globally, many centralized exchanges—including giants like Binance—manage transactions through internal ledgers, meaning that actual on-chain transfers only happen when assets are withdrawn to an external wallet. This system can allow for the creation and distribution of assets not actually held by the exchange, as demonstrated by the Bithumb incident. Korean law requires exchanges to hold blockchain-based assets in amounts matching their ledger entries, but enforcement and real-time verification remain challenging. As of September 2025, Bithumb reportedly held around 42,000 Bitcoins in entrusted assets and just 175 in its own wallet, yet the mistaken payout was about 14-15 times that figure.
The episode has revived memories of past “fat finger” incidents in South Korea, most notably the 2018 Samsung Securities case, where a clerical error led to the issuance of “ghost stocks” worth 112 trillion won. That incident also prompted calls for stronger safeguards and regulatory reforms. In the crypto space, the Bithumb mishap has intensified scrutiny of withdrawal procedures, cold wallet storage requirements, and the adequacy of current user protection laws, which some experts argue still lag behind those in markets like the European Union.
Fears of market manipulation have also been stoked. Some analysts worry that the incident demonstrates the possibility of “naked short selling” in crypto markets—where assets that do not exist are traded, intentionally or otherwise. “I believe this case will be remembered as a representative example showing that naked short selling is indeed possible in the crypto world,” said Seok Byoung-hoon, an economics professor at Ewha Womans University, as cited by ajunews.com.
As the dust settles, the Bithumb incident serves as a stark reminder of the risks inherent in the rapidly evolving world of cryptocurrencies. For investors, regulators, and industry insiders alike, it’s a wake-up call—one that may well reshape the landscape of virtual asset trading and oversight in South Korea and beyond.