South Korean regulators have launched a formal investigation into Bithumb after one of the most staggering operational errors ever seen in the crypto industry briefly flooded user accounts with tens of billions of dollars’ worth of Bitcoin.
The probe, led by Financial Supervisory Service (FSS), follows a February 6 incident in which the exchange mistakenly credited users with around 620,000 Bitcoin, an amount valued between $40 billion and $44 billion at the time.
How the mistake happened
The error occurred during a routine promotional campaign known as a “Random Box” event. The promotion was meant to distribute small cash rewards to users. Instead, due to a simple but catastrophic input mistake, payouts were entered in Bitcoin units rather than Korean won.
Within minutes, hundreds of users suddenly saw enormous BTC balances appear in their accounts—amounts that far exceeded Bithumb’s actual Bitcoin reserves. Industry estimates suggest the credited amount was more than ten times the exchange’s real holdings.
Once the issue was detected, Bithumb moved quickly. The exchange froze affected accounts and halted trading and withdrawals within roughly 35 minutes. Most of the mistakenly credited Bitcoin was recovered, but a small portion—worth millions of dollars—was reportedly sold or withdrawn before the freeze took effect.
Regulators step in
What began as an emergency review has now escalated into a full-scale investigation. The FSS is examining Bithumb’s internal controls, IT systems, and accounting safeguards to determine how such a large discrepancy could be created and distributed so quickly.
FSS officials have stated that the incident exposed serious weaknesses in internal oversight and electronic ledger management. Investigators are assessing whether the exchange violated South Korea’s Virtual Asset User Protection Act or other regulatory requirements.
If violations or negligence are confirmed, Bithumb could face penalties ranging from fines to operational restrictions. Regulators have also warned that users who knowingly sold or withdrew mistakenly credited Bitcoin may be legally required to return those funds under Korean unjust enrichment laws.
A wake-up call for the industry
The incident has sent shockwaves through South Korea’s crypto sector, one of the most tightly regulated digital asset markets in the world. While Bithumb acted quickly to contain the damage, regulators say the episode raises uncomfortable questions about risk controls at large exchanges handling billions in customer funds.
As crypto platforms increasingly resemble critical financial infrastructure, the FSS has made it clear that basic operational errors at this scale are no longer tolerable. The outcome of the investigation could set an important precedent for how exchanges are supervised going forward.
