Costly Mistake! Crypto shock at Bithumb; Exchange misfires $44 billion to customers - How it happened?

South Korean crypto exchange Bithumb inadvertently transferred more than $40 billion worth of bitcoin to hundreds of users during a promotional event, triggering a rapid selloff and prompting regulators to launch an urgent review of the platform’s internal controls, a Reuters report said.

The report added that, following the mistake, Bithumb apologised and informed that the company has recovered 99.7 per cent of the 6,20,000 bitcoins, worth around $44 billion at the current prices. The company also restricted trading and withdrawals for the 695 affected customers within 35 minutes of the accident.

The mishap happened after the exchange planned to distribute small cash rewards of 2,000 Korean won ($1.40) or more to each user as part of a promotional event, but winners received at least 2,000 bitcoins each instead, media reports said.

"We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management," Bithumb said in a statement.

However, South Korea's financial regulators, including the Financial Services Commission, said the incident "has exposed the vulnerabilities and risks of virtual assets."

Following an emergency meeting, regulators said they would conduct on‑site inspections of Bithumb, and potentially other cryptocurrency exchanges, if ongoing reviews uncover weaknesses in internal controls or issues related to their virtual‑asset holdings and operations.

Bitcoin prices on Bithumb briefly plunged 17 per cent to 81.1 million won on Friday evening before rebounding. The cryptocurrency later recovered to trade at 104.5 million won. Bithumb remains the country’s second‑largest crypto exchange, trailing industry leader Upbit.

Notably, the crypto currency has seen upbeat momentum for over a year now following the re-election of Donald Trump as US President and he putting his weight behind the asset class.

In Dec 2024, Bitcoin price for the first time crossed the USD 1,00,000-mark. During Trump's election campaign, he had pledged to make the United States the "crypto capital of the planet" and to build a national bitcoin reserve.

However, in 2026, despite a pro-crypto stance from the White House and rising institutional adoption, Bitcoin has crashed nearly 40 per cent from its record highs of USD 1,26,000 touched in early October 2025.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)