South Korea’s financial regulator has launched an inspection into crypto exchange Bithumb following a high-profile incident:
during a promotional campaign, some users were mistakenly credited 2,000 BTC instead of 2,000 South Korean won
(about $1.5). Authorities said the findings will be taken into account when drafting
updated legislation on virtual assets.
What happened: a promo error and a brief on-exchange BTC price drop
The incident occurred in February 2026. According to CoinDesk, the promotion was meant to award small prizes in won,
but a malfunction resulted in certain winners receiving thousands of bitcoins. As some recipients attempted to sell the unexpected balances,
the BTC price on Bithumb briefly diverged from the broader market, dropping to about 81 million won
(roughly $55,000) — around 10–15% below prices on other exchanges.
Bloomberg reported that the error was detected within roughly 20 minutes.
Still, even a short window can be enough for trades to execute and for value to move into harder-to-reverse states,
such as conversions to fiat, external withdrawals, or bank transfers.
Scale: how many BTC were distributed and what users managed to do
The Korea Times linked the mistake to a “random box” mechanic — users open a virtual chest and receive a prize
ranging from 2,000 to 50,000 won. The outlet wrote that Bithumb distributed around 620,000 BTC
to 249 winners. Some coverage noted that, if those figures are taken at face value, the average payout would be closer to
2,500 BTC per person, underscoring the magnitude of the failure and the need for stricter operational guardrails.
Although Bithumb moved to restrict trading and withdrawals on the affected accounts, financial authorities said that
86 users still managed to sell 1,788 BTC. The detail matters: even with rapid response,
the systеm left enough room for a portion of the funds to be traded, converted, or moved before restrictions fully took effect.
Recovery efforts: what was restored and what remains unresolved
As of February 7, 2026, Bithumb had recovered almost everything except 125 BTC valued at about
13 billion won, according to The Korea Times. The figure included roughly 3 billion won
that users had already transferred to bank accounts. Bithumb said it contacted recipients and is asking them to return the funds.
In practice, cases like this usually hinge on two tracks:
technical tracing (where the assets moved and whether they can be frozen or recovered)
and legal recourse (voluntary returns, claims, and, if necessary, court action).
If assets were moved to external wallets or converted through third-party services, recovery can depend on inter-exchange coordination
and regulatory involvement.
What the regulator is examining: root cause, client protection, and prevention
South Korea’s Financial Supervisory Service (FSS) has opened an inspection of Bithumb. The regulator said it will:
- determine the exact cause of the erroneous credits (human error, configuration failure, code bug, integration issue, or access control weakness);
- evaluate measures protecting client assets and whether risk is properly isolated between internal systems and user balances;
- review whether Bithumb had adequate controls and “circuit breakers” (credit limits, anomaly alerts, withdrawal locks, manual approvals for critical actions);
- assess whether the exchange can prevent a recurrence (release management, testing, permissions, monitoring, and incident response playbooks).
The regulator added that if it identifies any indicators of legal violations, it may initiate a
formal investigation. That step typically involves deeper scrutiny of systеm logs, operational procedures,
internal controls, and the exchange’s actions in the first minutes after the incident was discovered.
Why this matters for virtual asset legislation
The FSS noted that the incident exposed “fundamental shortcomings” that go beyond the scope of the current regulatory framework.
In other words, the case highlighted how existing rules may be too vague on operational risk at exchanges —
from promotional crediting logic to technical requirements for preventing anomalous credits and ensuring rapid containment.
The regulator said it will reflect the inspection results when preparing updated virtual asset legislation.
In practice, this could translate into clearer requirements such as:
hard limits on promotional credits,
two-step approval for critical operations,
mandatory rapid-freeze protocols for detected anomalies,
and higher standards for auditing, testing, and change management in production environments.
Bottom line: a case about money, trust, and operational safety
The Bithumb incident is more than a headline-grabbing “mistake worth billions.” It underlines why
internal controls and operational safety are critical in crypto markets.
Even a 20-minute window can lead to trades, conversions, and complex legal consequences.
That’s why the regulator is treating the case as systemic — and using it as input for shaping the next set of rules for South Korea’s virtual asset market.