In a bizarre cryptocurrency blunder, South Korean exchange Bithumb has confirmed it will reimburse users who suffered losses when the platform mistakenly sent more than $40 billion (₹3.3 lakh crore approx.) worth of Bitcoin during a promotional event — a mistake that briefly roiled the market and triggered a sharp sell-off.
The exchange said the error occurred during a reward distribution event on 6 February 2026, when an employee entered Bitcoin instead of the intended Korean won amount — meant to be a small cash prize of about 620,000 won (≈₹41,000) — causing 620,000 BTC to be credited to 695 users within minutes.
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How the Mistake Happened and Immediate Fallout
Bithumb explained that the mistake was identified within about 20 minutes of the massive credit appearing on user accounts. The platform halted trading and withdrawals for the affected accounts from around 7:35 p.m. to 7:40 p.m. local time, and reportedly recovered 99.7 % of the erroneously transferred Bitcoin.
However, before the error was contained, some users sold the mistakenly credited Bitcoin, contributing to extreme volatility on the exchange. Bitcoin prices on Bithumb briefly plunged about 17 % before stabilising.
Bithumb emphasised that the incident was not caused by hacking or a security breach, but rather an internal input error during the promotional distribution process.
Reimbursement Plan for Affected Users
Chief Executive Officer Lee Jae-won issued a public apology and announced that Bithumb would compensate customers who incurred losses from panic selling or unfavourable trades executed during the incident. The exchange said it will:
- Reimburse full losses that customers suffered from the price drop.
- Award an additional 10 % bonus on top of the reimbursed amount to affected users.
- Use corporate funds to cover any shortfalls to ensure users’ account balances are fully restored.
As of the afternoon of 7 February 2026, Bithumb estimated the total losses to users at around 1 billion won (≈₹66 crore) due to trading at adverse prices.
The exchange also stated it would offer additional compensation — such as crediting all users active during the incident with a fixed small amount and waiving trading fees temporarily — as part of broader customer protection measures.
Market Reaction and Regulatory Response
The promotional error not only shook confidence in Bithumb but also briefly impacted Bitcoin prices on its platform compared with broader markets. The abrupt influx of Bitcoin and subsequent panic trades caused significant price swings before normal conditions resumed.
South Korea’s Financial Services Commission convened an emergency inspection meeting involving other regulators to assess the situation and determine whether gaps in exchange controls or monitoring systems contributed to the error.
Authorities have stressed the need for stronger internal controls and safeguards within crypto exchanges to prevent similar incidents that can undermine investor trust and market stability.
Why This Incident Matters
The Bithumb error highlights the risks of human and system errors in the highly automated and high-value world of cryptocurrency exchanges, where even small mistakes can create massive value transfers in highly liquid assets like Bitcoin. The event has prompted discussions across the crypto ecosystem about improving transaction checks, verification layers, and automated safeguards.
It also underscores how promotional or non-transactional systems, often thought to be low-risk, must still be subject to stringent controls when dealing with blockchain assets that trade at extreme values relative to traditional currencies.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
