A clerical error of epic proportions has landed South Korean crypto giant Bithumb in hot water, prompting regulators to initiate a sweeping investigation. During a routine promotion, the exchange mistakenly distributed 620,000 Bitcoins—equivalent to 60 trillion won or $41.2 billion—to select customers, despite lacking anywhere near that quantity.
The Financial Supervisory Service (FSS) confirmed the formal probe after inspecting Bithumb’s premises. An official emphasized the gravity: ‘Market-disrupting conduct will not be tolerated; legal action is imminent.’
Friday’s fiasco saw 249 accounts balloon with illusory riches, sparking immediate sell-offs. By the time Bithumb detected and reversed the credits, 1,788 Bitcoins had been liquidated, vanishing into the ether.
Bithumb’s off-chain book-entry system, designed for efficiency, backfired spectacularly. It maintains internal ledgers separate from blockchain verification, prone to ‘phantom balance’ errors if not meticulously managed. The exchange’s slim holdings—around 42,000 BTC, predominantly user-owned—amplified the absurdity.
Timing couldn’t be worse, with South Korea’s parliament deliberating virtual asset frameworks. The FSS plans rigorous IT audits, steep penalties, and fortified regulations to avert future debacles. Bithumb’s saga highlights the urgent need for robust systems as crypto matures, potentially catalyzing industry-wide reforms.