A major South Korean cryptocurrency exchange has pledged to fully compensate clients who sold at a loss after a staggering administrative error led to the mistaken distribution of more than $40 billion worth of Bitcoin to users.
Bithumb, one of the country’s largest trading platforms, announced it would reimburse losses after the colossal blunder triggered a brief but sharp market selloff.
The incident occurred on Friday evening when an employee intended to distribute 620,000 Korean won (approximately $424) to winners of a promotional event. Instead, the employee mistakenly keyed in 620,000 Bitcoin. The error resulted in the cryptocurrency—worth over $40 billion at the time—being credited to 695 user accounts.
Bithumb said the mistake was identified within 20 minutes, but not before significant disruption. “An abnormal amount of Bitcoin was mistakenly distributed to some users,” the exchange stated. “As some of the accounts proceeded to sell the credited Bitcoin, the Bitcoin price experienced a brief yet sharp fluctuation.”
Platform data showed prices plummeted by approximately 17% in minutes, falling from around 98.29 million won ($67,188) to 81.1 million won ($55,400). Trading volumes soared as the erroneously credited Bitcoin hit the market.
The exchange began halting trading and withdrawals from the affected accounts and fully blocked them. Through these emergency measures, Bithumb managed to recover 99.7% of the incorrectly distributed Bitcoin.
In a statement on Saturday, Bithumb’s Chief Executive Officer, Lee Jae-won, apologised and outlined the compensation plan. Customers who engaged in “panic-selling” during the brief window will have their full loss spread reimbursed and will receive an additional 10% bonus. The company estimates customer losses total around 1 billion won and stated it would use corporate assets to cover any shortfall and restore balances.
“We offer our deepest apologies for the confusion and inconvenience,” Lee said. “We acknowledge, with a deep sense of responsibility, that we failed to uphold the two core values that define a virtual‑asset exchange — stability and integrity.”
Bithumb confirmed customer losses from panic selling during the incident totaled approximately 1 billion Korean won (over $680,000) as of February 7. The company will provide 110% compensation to customers who sold at unfavorable prices on Friday.
All customers who accessed the platform during the incident will receive 20,000 KRW ($15), and trading fees will be waived for seven days.
The exchange also announced a permanent Customer Protection Fund worth 100 billion Korean won ($68 million) to address future incidents.
The error prompted immediate regulatory scrutiny, with South Korea’s Financial Services Commission convening an emergency inspection meeting on Saturday. The company stated that it is working with regulators after reporting the matter to authorities and will implement system upgrades such as enhanced asset verification, multi-step payment approvals, and an AI-powered Safeguard for 24-hour abnormal transaction detection.
The incident adds to existing turbulence in cryptocurrency markets, which have experienced significant volatility and a series of liquidations since last October, undermining investor confidence.
