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Massive Bitcoin payout error rocks Bithumb exchange
South Korea's Bithumb cryptocurrency platform mistakenly credited customers with 2,000 bitcoins each-worth over $40 billion (£32 billion) in total-during a routine rewards distribution on Friday, briefly turning hundreds into paper millionaires.
How the glitch unfolded
Bithumb intended to issue a modest cash reward of 2,000 South Korean won (approximately $1.37) to users. Instead, the system erroneously allocated 2,000 bitcoins per account, the company confirmed in a statement.
Within 35 minutes, the exchange detected the error and froze trading and withdrawals for the 695 affected customers. By the time the mistake was corrected, 620,000 bitcoins-99.7% of the misallocated funds-had been recovered, Bithumb reported.
Exchange responds with compensation and reforms
Bithumb issued a public apology, emphasizing that the incident stemmed from an internal system error rather than a security breach or hack. "This matter has no connection to external threats, and our platform's security and customer asset management remain intact," the company stated.
As a gesture of goodwill, Bithumb announced it would compensate all active users at the time of the incident with 20,000 won ($13.66) each. The exchange also plans to waive trading fees and introduce artificial intelligence to monitor abnormal transactions.
"We will treat this accident as a critical lesson and prioritize customer trust and stability over growth,"
Lee Jae-won, Bithumb CEO
Regulators launch inquiry
South Korea's Financial Supervisory Service (FSS) convened an emergency meeting on Saturday to assess the incident. The regulator indicated that any evidence of illegal activity would trigger a formal investigation.
Bithumb pledged full cooperation with authorities, signaling a broader industry reckoning over operational safeguards in digital asset trading.
Broader implications for crypto oversight
The incident echoes a similar error in April 2024, when Citigroup mistakenly transferred $81 trillion to a client's account-an amount exceeding global GDP-due to human oversight. The transaction was reversed within hours after a third employee flagged the discrepancy, according to the Financial Times.
Analysts suggest the Bithumb case may accelerate calls for stricter regulatory controls in cryptocurrency markets, particularly around transaction verification and risk management protocols.
