South Korean crypto exchange Bithumb is under formal investigation after a mistaken Bitcoin payout worth about ₩62 trillion, or around $43 billion. The Financial Supervisory Service, or FSS, upgraded an earlier on-site review into a full probe this week. Regulators say they want to know how such a huge mistake was even possible inside the exchange’s systems.
The incident occurred on February 6th while consumers were participating in a “random box” promotional event. Some clients received up to 2,000 Bitcoin instead of ₩2,000, or around one US dollar, since a staff member put bitcoin as the prize unit instead of Korean won. The incident awarded approximately 620,000 Bitcoin to 695 accounts overall, which is significantly more than the 46,000 Bitcoin that Bithumb truly had at the time.
What Regulators Are Investigating
The FSS is examining Bithumb’s internal ledger system and approval process to see why no controls stopped the payout. Officials say the case exposes serious weaknesses in how virtual asset exchanges track balances and match them to real holdings. They are also looking at possible violations of South Korea’s Virtual Asset User Protection Act, which requires exchanges to hold the same type and amount of assets as their customers deposit.
Regulators met with Bithumb officials in an emergency and promptly dispatched an inspection team to the site. Fines, more stringent IT regulations, and higher requirements for how exchanges handle user cash and advertisements could result from the assessment. The Financial Intelligence Unit, which is looking into any possible anti-money laundering concerns, and the Financial Services Commission are also working together with the authorities.
Market Reaction And Bithumb User Losses
The glitch created “ghost” Bitcoin only inside Bithumb’s internal ledger, so no real coins moved on the blockchain. Still, users rushed to sell the phantom balances, causing a sharp local price drop. Bitcoin on Bithumb briefly traded 15 to 30 percent below global market prices before stabilizing.
Bithumb says it has recovered about 99.7 percent of the mistaken Bitcoin and most of the amounts users sold during the event-driven crash. The remaining missing coins are estimated at around 125 Bitcoin, leaving the exchange with an expected loss of several million dollars, which it has pledged to cover itself. Authorities warn that the case could further damage trust in South Korea’s crypto market if systems are not fixed.
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