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- Bithumb mistakenly sent 620,000 BTC due to a system error, briefly worth $42 billion.
- The exchange recovered 99.7% of funds but is now pursuing legal action for the remaining Bitcoin.
- South Korean regulators have tightened rules, requiring exchanges to reconcile balances every five minutes.
South Korean crypto exchange Bithumb has launched legal action to reclaim 7 Bitcoin still unreturned following one of the industry’s most dramatic payout mistakes. The incident, triggered by a simple input error, briefly sent shockwaves through the market and has since drawn regulatory scrutiny across the country.
A Costly Error With Billion-Dollar Implications
The issue dates back to February 6, when Bithumb intended to distribute modest rewards—about 620,000 Korean won (roughly $420)—to 249 event participants. Instead, a system error resulted in the accidental distribution of 620,000 Bitcoin.
At the time, the mistaken transfer was valued at an astonishing 62 trillion won (around $42 billion). Although the exchange identified and reversed the error within minutes, some recipients had already moved or sold the funds, complicating recovery efforts.
Bithumb reported that it managed to recover 99.7% of the mistakenly sent assets on the same day. The remaining portion—approximately 1,788 BTC that had already been liquidated—was covered using the company’s own reserves to protect users and stabilize operations.
Legal Pressure Mounts on Remaining Holdouts
Despite aggressive follow-ups, a small group of users has refused to return the remaining Bitcoin. Bithumb has now filed for a provisional attachment, a legal mechanism in South Korea that allows courts to freeze assets ahead of a civil lawsuit.
According to local reports, some recipients argue they should not be held accountable for the exchange’s internal mistake. However, legal experts suggest that such defenses may not hold up. Under South Korean law, mistakenly received funds are typically classified as unjust enrichment, meaning recipients are legally obligated to return them.
The move signals a shift from negotiation to enforcement, as Bithumb seeks to close the chapter on the incident and recover the final missing assets.
Regulators Tighten Oversight on Crypto Exchanges
The fallout has also prompted action from Financial Services Commission, South Korea’s top financial watchdog. In response, regulators now require crypto exchanges to reconcile internal ledgers with actual asset holdings every five minutes.
Also Read: Bithumb IPO Delayed to 2028 as Ripple Pushes Crypto Adoption Forward
An investigation revealed that several major platforms were previously performing reconciliations only once per day, leaving critical gaps in error detection. The new rule aims to reduce systemic risk and prevent similar incidents from escalating.
The Bithumb payout error underscores how even minor operational mistakes can spiral into multi-billion-dollar crises in the crypto sector. While the exchange has largely contained the damage, its legal pursuit of remaining funds—and the regulatory changes that followed—highlight a growing push for accountability and tighter safeguards in digital asset markets.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
