Bithumb, South Korea’s second-largest crypto exchange, faced an unusual situation after an internal payout mistake led to hundreds of customers receiving far more Bitcoin than intended.
The incident happened during an event reward distribution on February 6 and briefly caused sharp price movement when some users sold the unexpected funds.
According to the exchange’s February 7 announcement, the issue was not related to any hacking attempt. Instead, the problem came from a simple but serious input error during the reward payment process, where the Bitcoin quantity was entered incorrectly.
The rewards were first paid at 19:00 local time to 695 people. Within 20 minutes, Bithumb noticed the abnormal overpayment. By 19:35, the platform began blocking transactions and withdrawals for the affected accounts, completing restrictions within five minutes.
This rapid response helped to calm the market quickly. Bithumb explained that Bitcoin’s price returned to normal in five minutes, and their system to prevent liquidation worked properly to prevent a chain reaction of liquidation.
Recovery Efforts Secure Majority of Incorrect Payments
The amount of overpayment was very high. Bithumb explained that 620,000 BTCs were mistakenly distributed. Based on the in-house monitoring system for irregular transactions, the exchange managed to retrieve 618,212 BTC, which is 99.7% of the total amount.
The company also stated that around 93% of the assets that were already sold, which were 1,788 BTC, have been recovered. Notably, Bithumb has confirmed that there were no external transfers of the wrongly paid Bitcoin, which means that the funds did not actually leave the exchange.
The exchange emphasized that customer wallet balances are exactly the same as the balances reflected in the accounts due to strict accounting practices. The exchange also performs quarterly external asset due diligence with an independent accounting firm.
Bithumb Promises Process Redesign After Incident
The exchange claims that it is taking the current situation very seriously and will improve the entire process of paying out assets so that such issues will not occur again in the future.
They further claims that if there is any Bitcoin that has not been recovered and has already been sold, it will be paid for using the corporate assets of the exchange, meaning that no customer will lose any money. They apologizes again for the confusion that occurred during the event.
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