South Korean cryptocurrency exchange Bithumb accidentally distributed around $44 billion worth of bitcoin to customers during a promotional event, causing temporary market volatility. The exchange quickly recovered most of the funds and assured users of no security breaches. Regulators have launched inspections into the incident.
On February 8, 2026, Bithumb, one of South Korea's largest crypto exchanges founded in 2014, experienced a significant operational error during a planned giveaway of small cash rewards worth about 2,000 Korean won ($1.40) per user. Instead, an employee mistakenly processed the distribution as 2,000 bitcoin each for some customers, resulting in the transfer of roughly 620,000 bitcoin valued at approximately $44 billion at current prices to 695 affected accounts.
Bithumb detected the irregularity swiftly, correcting accounts within five minutes and restricting trading and withdrawals within 35 minutes. The exchange recovered 99.7% of the excess bitcoin, including 618,212 bitcoin directly and an additional 1,788 from sold assets. However, a small portion—about 125 bitcoin worth $9 million—remains unrecovered from users who sold or traded before restrictions took effect, with Korean authorities estimating over $2 billion in such sales. Bithumb stated it would cover these losses using corporate funds.
The mishap triggered immediate market disruption on the platform, where the bitcoin/Korean won trading pair dropped 15-17% to around 81.1 million won ($55,000) before rebounding to 104.5 million won. Bithumb's 'domino liquidation prevention system' helped mitigate broader cascading effects.
'We would like to make it clear that this incident is unrelated to external hacking or security breaches,' the exchange said in a statement. 'There are no problems with system security or customer asset management.' No preexisting customer assets were lost.
South Korea's Financial Services Commission responded by highlighting vulnerabilities in the virtual asset sector and initiating an on-site inspection at Bithumb's offices on February 7, requesting details on employee payment authorizations. Internal reviews revealed that the exchange's systems allowed payouts of loyalty points, Korean won, bitcoin, and Ethereum without formal settlement procedures, increasing error risks.
Exchange Business Division Vice President Hwang Seung-wook acknowledged the issue in an internal email: 'The fact that a single error in setting an event reward unit can destabilize an entire crypto exchange demonstrates the current state of our systems.' Bithumb pledged a complete redesign of asset payment procedures and enhanced internal controls.
To address user impacts, Bithumb announced compensation: affected sellers would receive their full sale amount plus 10%, trading fees waived for seven days from February 9, and 20,000 Korean won ($15) for active users at the time. The incident occurs amid Bithumb's plans for a US public listing and an ongoing probe into its marketing by consumer watchdogs, underscoring operational challenges in the sector.
