After a major payout mistake, Bithumb is asking a court to freeze the assets of certain users. The exchange is trying to recover 7 Bitcoin (worth around $496,000) from those who haven’t returned funds two months after the error occurred.
As an analyst, I see this legal resolution as closing the book on what was a truly massive and unintentional Bitcoin distribution error – one of the biggest we’ve seen in exchange history. It’s good to finally have this last outstanding issue resolved.
Bithumb $43 Billion Bitcoin Error: What Actually Happened
On February 6th, a mistake during a Bithumb promotional event caused 695 users to receive a much larger prize than intended. An employee accidentally sent 2,000 Bitcoin (BTC) – worth a significant amount of money – to each winner instead of the intended 2,000 Korean won, which is about $1.37.
In minutes, Bithumb’s internal ledger showed 620,000 BTC credited to user accounts.
The cryptocurrency traded on Bithumb wasn’t genuine Bitcoin, but simply data recorded in a system. Despite this, some users quickly sold their holdings. This caused the price of Bitcoin on Bithumb to plummet 17% to $55,000, while the price elsewhere remained relatively stable.
Accounts were frozen within 35 minutes. By the end of the day, 99.7% had been reversed.
A recent internal email from Bithumb Vice President Hwang Seung-wook highlighted a critical flaw in their systems: a simple mistake with event rewards could potentially crash the entire exchange.
Bithumb Fined After Regulatory Failures Exposed
Getting back on track wasn’t the final step. South Korea’s financial regulators – the FSS, FSC, and FIU – all began investigations. CEO Lee Jae-won admitted to lawmakers that the company had weaknesses in its internal controls.
According to lawmakers, regulators inspected the cryptocurrency exchange Bithumb three times between 2022 and 2025 but failed to identify any major problems that could have prevented issues.
Three weeks ago, South Korea’s Financial Intelligence Unit (FIU) penalized Bithumb with a $24.6 million fine due to 6.65 million instances of failing to comply with anti-money laundering regulations. They also stopped Bithumb from accepting new users for six months.
The recent incident has significantly impacted Bithumb’s plans for expansion. As a consequence, the company has postponed its intended initial public offering in the US until 2028.
Is Your Crypto Safe on a Centralised Exchange?
The recent court case involving 7 Bitcoin isn’t actually about the $496,000 involved. It’s about whether people who intentionally kept money gained from a clear error in a system can be held legally responsible – and South Korean courts are now considering this issue for the first time.
South Korea’s highest court decided in January that Bitcoin stored on exchanges can be legally considered property and seized if necessary. Now, this decision is being put into practice for the first time with a specific case.
The recent Bithumb situation highlighted a little-known truth within the cryptocurrency industry: when you see a balance on an exchange, it’s not actual Bitcoin you own. It’s simply a record within the exchange’s internal accounting system.
Read More
- United Airlines can now kick passengers off flights and ban them for not using headphones
- Crimson Desert: Disconnected Truth Puzzle Guide
- All 9 Coalition Heroes In Invincible Season 4 & Their Powers
- Mewgenics vinyl limited editions now available to pre-order
- Invincible Season 4 Episode 6 Release Date, Time, Where to Watch
- The Boys Season 5 Spoilers: Every Major Character Death If the Show Follows the Comics
- Assassin’s Creed Shadows will get upgraded PSSR support on PS5 Pro with Title Update 1.1.9 launching April 7
- Grok’s ‘Ask’ feature no longer free as X moves it behind paywall
- ‘Timur’ Trailer Sees Martial Arts Action Collide With a Real-Life War Rescue
- Grey’s Anatomy Season 23 Confirmed for 2026-2027 Broadcast Season
2026-04-09 13:51