South Korean crypto exchange Bithumb is under formal investigation following a mistaken Bitcoin payout of about ₩62 trillion (approximately $43 billion). The Financial Supervisory Service, or FSS, upgraded an earlier on-site review into a full probe this week. Regulators want to know how such a significant mistake was possible within 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, because a staff member set Bitcoin as the prize unit instead of Korean won. The incident awarded approximately 620,000 Bitcoin to 695 accounts, significantly more than the 46,000 Bitcoin Bithumb actually held at the time.
What Regulators Are Investigating
The FSS is reportedly 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 into potential violations of South Korea’s Virtual Asset User Protection Act, which requires exchanges to hold the same types and amounts 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 investigating potential anti-money laundering concerns, and the Financial Services Commission are also working 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 15-30 percent below global market prices before stabilizing.
Bithumb says it has recovered about 99.7 percent of the Bitcoin mistakenly sent and most of the funds users sold during the event-driven crash. The remaining missing coins are estimated at approximately 125 Bitcoin, leaving the exchange with an expected loss of several million dollars, which it has pledged to cover. Authorities warn that the case could further damage trust in South Korea’s crypto market if systems are not fixed.
READ MORE: Sushi Launches Native Solana Integration With Cross-Chain Swaps
