South Korea’s cryptocurrency exchange Bithumb caused widespread market turmoil after a Bithumb Bitcoin giveaway accidentally sent more than $40 billion worth of bitcoins to customers, the company said on Saturday.
The incident occurred on Friday during a promotional event in which the exchange intended to distribute small cash rewards of 2,000 Korean won ($1.40) or more. Instead, winners received at least 2,000 bitcoins each, media reports noted.
Bithumb quickly restricted trading and withdrawals for the 695 affected accounts within 35 minutes and later recovered 99.7% of the 620,000 bitcoins, valued at roughly $44 billion at current prices. The company emphasised that the incident was not the result of hacking or security failures.
Regulators Scrutinize Bithumb Bitcoin Giveaway
South Korea’s Financial Services Commission and other regulators said the event highlighted vulnerabilities in the management of virtual assets. Following an emergency meeting, they announced plans to inspect Bithumb and other crypto exchanges, reviewing internal controls and operational procedures.
The error triggered a sharp market reaction, with bitcoin briefly plunging 17% on Bithumb to 81.1 million won before recovering to 104.5 million won. Bithumb remains behind Upbit, the country’s dominant cryptocurrency exchange, in trading volume.
