By Ayo Kehinde
A South Korean cryptocurrency exchange, Bithumb, has apologised after a technical glitch led to the accidental distribution of more than $40bn (£32bn) worth of bitcoin to customers, briefly turning hundreds of users into instant multi-millionaires.
The incident occurred on Friday when the exchange intended to credit customers with a promotional reward of 2,000 won (about $1.37). Instead, due to an internal system error, 2,000 bitcoins were mistakenly transferred to affected accounts.
Bithumb said 695 customers were impacted by the error, but the situation was quickly brought under control within 35 minutes. The exchange immediately restricted trading and withdrawals on the affected accounts and was able to recover 99.7 percent of the estimated 620,000 bitcoins wrongly credited.
The company stressed that the incident was not the result of hacking or a security breach.
“We want to make it clear that this matter has nothing to do with external hacking or security breaches, and there is no problem with system security or customer asset management”, Bithumb said in a statement.
South Korea’s Financial Supervisory Service (FSS) convened an emergency meeting on Saturday to review the incident and warned that any indication of illegal activity would prompt a formal investigation.
Bithumb pledged full cooperation with regulators, with Chief Executive Officer, Lee Jae-won, describing the incident as a wake-up call for the exchange. He said the company would prioritise customer trust and stability over rapid expansion.
As part of corrective measures, Bithumb announced compensation of 20,000 won (about $13.66) for all users active on the platform at the time, alongside waived trading fees. The exchange also said it would strengthen internal controls, improve verification processes and deploy artificial intelligence tools to detect abnormal transactions.
The incident has reignited debate over operational risks and regulatory oversight in the fast-growing cryptocurrency sector. It also echoes similar errors in traditional finance, including an April 2024 incident in which US banking giant, Citigroup, mistakenly credited a customer with $81 trillion before reversing the transaction within hours.
