South Korean cryptocurrency exchange Bithumb has confirmed it accidentally paid out 2,000 bitcoins to customers instead of small cash rewards, resulting in a mistaken distribution valued at over $40 billion at the time.
The incident, first reported by BBC News, occurred during a customer reward campaign where the exchange intended to credit users with 2,000 South Korean won (approximately $1.37) each. Instead, a system error caused some users to receive 2,000 BTC.
695 Users Briefly Became Multi-Millionaires
As a result of the error, 695 customers briefly found themselves holding massive bitcoin balances, instantly turning them into crypto millionaires on paper.
Bithumb detected the issue quickly and halted trading and withdrawals within 35 minutes of the mistake being executed.
According to the company, 99.7% of the mistakenly distributed bitcoin was recovered, limiting the long-term financial damage.
No Hack, No Security Breach — Bithumb Says
Bithumb emphasized that the incident was not caused by hacking, and that its internal security systems were not compromised.
Instead, the exchange attributed the error to an operational and system-level mistake during the execution of the rewards distribution.
South Korea’s financial regulator has since confirmed it will review the incident and may investigate further if any illegal activity is identified.
See more related: Global Crypto Market Cap Holds at $3.54 Trillion Amid Cautious Recovery
Compensation and Corrective Measures
Following the incident, Bithumb issued a public apology and outlined steps to restore customer trust. These measures include:
- Paying 20,000 won (about $13.66) in compensation to affected users
- Waiving certain trading fees
- Improving internal systems and deploying AI tools to detect unusual transactions
The exchange said these steps are aimed at preventing similar incidents in the future.
Why This Incident Matters for the Crypto Industry
While rare, high-profile operational errors like this highlight ongoing challenges in the crypto industry around:
- Internal controls and automation
- Human oversight in financial systems
- Risk management during mass distributions
The incident has also reignited discussions around stricter crypto regulation, particularly in highly active markets such as South Korea, where exchanges handle billions of dollars in daily volume.
For the global crypto ecosystem, the Bithumb error underscores that operational risk can be just as dangerous as security breaches, even in mature markets.
Editorial Takeaway
Bithumb’s $40 billion bitcoin payout error is a stark reminder that, as crypto platforms scale, process discipline and safeguards must scale with them.
Even without malicious intent, a simple operational mistake can trigger systemic risk, regulatory scrutiny, and reputational damage — reinforcing why exchanges must invest as heavily in internal controls as they do in growth.
