Bithumb Bitcoin Mistake Sparks $40bn Crypto Chaos

Published: 10 February 2026. The English Chronicle Desk. The English Chronicle Online.

South Korea’s crypto exchange Bithumb is working urgently to recover the massive Bithumb bitcoin mistake that occurred last week during a promotional event. The incident, which mistakenly credited customers with 620,000 bitcoins, has left the exchange facing potential financial and legal complications. Bithumb confirmed it corrected most erroneous credits but still faces challenges recovering approximately 13bn won after some recipients withdrew or sold funds before the Bithumb bitcoin mistake was detected.

The so-called Bithumb bitcoin mistake unfolded on 6 February when an employee entered prize amounts in bitcoin rather than Korean won for a “random box” promotion. The intended total prize was 620,000 won, roughly $423, to 695 qualifying participants. However, the employee accidentally sent 620,000 bitcoins, valued at over $42bn, instead. Of those eligible, 249 opened their prize boxes and received rewards equivalent to far more bitcoin than Bithumb actually holds.

Lee Chan-jin, governor of South Korea’s Financial Supervisory Service, described the Bithumb bitcoin mistake as “catastrophic” for those who sold the funds quickly. Rising bitcoin prices since the incident mean affected customers may face significant losses if they are required to return the cryptocurrency. Lee added that the event exposed “structural problems” within internal ledger systems across cryptocurrency exchanges.

Legal experts are divided over potential prosecution for customers who sold the bitcoin, referencing a 2021 Supreme Court ruling stating cryptocurrency does not legally constitute “property” under Korean law. This has left both regulators and the exchange navigating uncharted legal territory while seeking to recover the assets.

Bithumb stated it has corrected 99.7% of the mistaken credits through internal ledger reversals and issued a formal apology to its customers. Nevertheless, 86 users sold approximately 1,788 bitcoins within the brief 35 minutes before accounts were frozen, triggering a minor price drop on Bithumb’s platform. Some of the funds were withdrawn to personal bank accounts, while others were used to buy additional cryptocurrencies, according to local reports.

The exchange is now engaging in what it describes as “one-on-one persuasion” with roughly 80 customers who cashed out, requesting voluntary returns of the equivalent won value. Bithumb reportedly aims to prevent civil lawsuits, which could legally require the return of the original cryptocurrency rather than a cash equivalent.

South Korea’s Financial Supervisory Service has escalated the matter to a full investigation, while the country’s parliament has scheduled an emergency hearing on 11 February to question both the exchange and financial authorities about the Bithumb bitcoin mistake and its management.

Bithumb emphasized that the incident resulted from internal human error and not from hacking or external security breaches. The company pledged to redesign its asset payment process and enhance internal controls to prevent future mistakes.

The Bithumb bitcoin mistake has drawn international attention, highlighting vulnerabilities in cryptocurrency exchanges’ operational processes. Industry analysts have suggested that while Bithumb has managed to rectify most of the mistake, the event serves as a cautionary tale about oversight failures and the risks posed by manual entry errors in large-scale financial systems.

Observers note that the fallout could influence regulatory approaches across South Korea, where authorities are increasingly scrutinizing exchanges to protect consumer interests. The Financial Supervisory Service is reportedly reviewing internal protocols and considering broader systemic reforms to prevent similar incidents.

Despite the ongoing recovery efforts, Bithumb faces reputational challenges, as the incident has raised questions about its internal audit procedures and crisis response strategies. Analysts emphasize that the swift correction of 99.7% of the credits demonstrates operational resilience, yet the legal uncertainty surrounding sold bitcoin adds complexity to the resolution process.

The wider cryptocurrency market is observing developments closely, as the Bithumb case may set precedents for customer liability and exchange accountability in South Korea and beyond. The incident underscores the importance of robust internal controls and continuous monitoring of digital asset flows, particularly during promotional campaigns or other high-volume events.

In conclusion, South Korea’s Bithumb is actively recovering from a Bithumb bitcoin mistake that exposed systemic weaknesses, legal ambiguities, and operational risks. The exchange continues to pursue voluntary returns while regulators intensify oversight, aiming to prevent similar crises. The incident remains a stark reminder of the volatile and complex nature of cryptocurrency management.

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