South Korean regulators have launched an investigation into Bithumb following a major operational error where the cryptocurrency exchange accidentally distributed approximately 620,000 Bitcoin worth around $40–44 billion at the time, or up to $60 billion in some reports to users as part of a promotional rewards campaign.
The incident occurred on February 6, 2026, during a “Random Box” or similar promotional event. Bithumb intended to credit eligible users reportedly 695 participants with small cash rewards in Korean won (KRW), typically around 2,000 KRW ~$1.37–$1.50 or up to 50,000 KRW per user.
However, due to a staff input error—entering “BTC” instead of “KRW” as the reward unit—the system credited users with thousands of Bitcoin each, at least 2,000 BTC per affected user in many accounts. This created “phantom” or erroneous balances on the exchange’s internal ledger.
Within minutes, some users began selling the miscredited Bitcoin, causing a sharp localized flash crash on Bithumb’s BTC/KRW trading pair—Bitcoin briefly dropped to as low as around $55,000 on the platform over 10–17% below global prices, while global markets remained largely unaffected.
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Bithumb detected the issue quickly within about 5–35 minutes, restricted trading and withdrawals for the affected accounts, and recovered 99.7% of the erroneously distributed Bitcoin. The remaining small portion around 0.3%, or roughly 1,800–2,000 BTC was covered using the exchange’s own reserves.
The company emphasized that this was an internal configuration mistake, not a security breach or hack, and that customer assets remain secure. Bithumb has apologized, vowed cooperation with authorities, and taken steps to compensate users: Affected sellers who incurred losses received full reimbursement plus a 10% bonus.
Broader users active during the incident got compensation. The exchange committed to prioritizing customer trust and improving internal controls. South Korea’s Financial Services Commission (FSC) and Financial Supervisory Service (FSS) held an emergency meeting and launched an on-site inspection of Bithumb.
They described the event as exposing serious vulnerabilities and risks in the virtual asset sector, including inadequate internal controls like no caps on reward sizes, lack of secondary approvals, and allowing phantom balances to be tradable. Broader reviews of other exchanges’ systems and asset holdings are underway, with potential for wider inspections or stricter rules if irregularities are found.
Some reports note this comes amid prior scrutiny of Bithumb; a Fair Trade Commission probe into its liquidity claims. The incident has rattled confidence in Korean crypto exchanges’ operational safeguards and highlighted risks in handling promotions and asset distributions.
Bithumb’s CEO stated it would serve as a lesson to focus on reliability over growth. No evidence of intentional wrongdoing has been reported, but the probe continues to assess compliance and prevent future “fat-finger” errors in the industry.
This probe predates (by just days) the major Bitcoin airdrop/distribution error on February 6, 2026, which has drawn separate scrutiny from financial regulators like the Financial Services Commission (FSC) and Financial Supervisory Service (FSS).
The liquidity claims investigation adds to mounting pressure on Bithumb amid its ambitions for a potential New York IPO and efforts to regain competitive ground against Upbit. The KFTC’s actions highlight broader concerns in South Korea’s crypto sector about truthful advertising, consumer protection, and fair competition.
No final outcomes, fines, or sanctions have been but findings of violations could lead to penalties, mandated marketing corrections, or reputational damage. This prior probe underscores why the recent operational mishap has amplified regulatory attention — it exposed perceived gaps between Bithumb’s marketed “top liquidity” image and real-world system vulnerabilities.
Bithumb has not publicly commented in detail on the KFTC matter in recent reports, focusing instead on the airdrop recovery and cooperation with authorities.