South Korean cryptocurrency exchange Bithumb said it mistakenly distributed more than $40 billion worth of bitcoin to customers during a promotional campaign, triggering a sharp but short-lived selloff and forcing the platform to halt trading and withdrawals for hundreds of users.
The incident occurred on Friday when Bithumb intended to issue small promotional rewards of 2,000 Korean won, or about $1.37, to selected users. Instead, due to what the exchange described as an internal error, recipients were credited with at least 2,000 bitcoins each, according to local media reports. At current market prices, the total mistakenly distributed amounted to roughly 620,000 bitcoins, valued at about $44 billion.
Bithumb apologized publicly on Saturday, saying it had managed to recover 99.7% of the erroneously credited bitcoins within a short period. The exchange said it identified the problem and restricted trading and withdrawals for the 695 affected accounts within 35 minutes of the mistaken distribution, limiting further losses and market disruption.
The sudden influx of bitcoin onto customer accounts led to a rapid selloff on the exchange, briefly sending bitcoin prices down as much as 17%. Charts from Bithumb show prices falling to around 81.1 million won on Friday evening before stabilizing and rebounding. Bitcoin later recovered most of the losses and was last trading at approximately 104.5 million won.
In a statement, Bithumb stressed that the incident was not the result of a cyberattack or external interference. The exchange said there were no security breaches and no underlying issues with its systems or the management of customer assets, framing the event as a purely operational mistake linked to the promotion.
The episode has drawn attention to operational risks in cryptocurrency exchanges, particularly in markets like South Korea where retail trading activity is high and price movements on individual platforms can be abrupt. Bithumb is one of the country’s largest crypto exchanges, though it trails market leader Upbit, which dominates the domestic cryptocurrency trading landscape.
While the swift recovery of most of the mistakenly distributed funds helped prevent broader fallout, the incident underscores how even brief technical errors can ripple through digital asset markets, causing sharp price swings and renewed scrutiny of exchange controls and safeguards.
