On the evening of February 6, Bitcoin prices on Bithumb, South Korea’s second-largest cryptocurrency exchange, plummeted by 17% within minutes, dropping to as low as 81.11 million Korean won (about $55,000) per coin.
The cause was an almost unbelievable operational blunder: The exchange had intended to reward users with 2,000 to 50,000 Korean won (approximately 9.5 to 237 RMB) each, but mistakenly set the reward unit to Bitcoin instead of Korean won during system configuration.
Event Overview
A routine promotional campaign at Bithumb turned into one of the most expensive operational errors in the industry’s history. At 7:00 PM local time on Friday, Bithumb launched its "Random Treasure Box" event.
What was meant to be a simple marketing campaign offering small cash rewards to participants escalated into a shocking Bitcoin airdrop due to a staff mistake in setting the reward unit.
According to Bithumb’s post-event review, the exchange noticed the anomaly 20 minutes after the event began—"Bitcoin was being distributed instead of Korean won."
It took a full 35 minutes from the initial error to its discovery and the launch of mitigation measures, allowing the impact to spread rapidly. It wasn’t until 7:40 PM that Bithumb froze trading and withdrawal permissions for affected accounts.
Discrepancies in Data and Regulatory Response
There are significant discrepancies in reports about the amount of Bitcoin mistakenly distributed. Korean media outlets like Yonhap News reported that Bithumb issued as much as 620,000 Bitcoins in error, valued at over $44 billion at the time.
However, international media sources cited a figure closer to 2,000 Bitcoins. This wide gap highlights the confusion and chaos in the information flow surrounding the event.
Regardless of whether the number was 620,000 or 2,000, the incident was enough to alarm South Korean regulators. Following the event, the Financial Supervisory Service convened an emergency meeting on Saturday morning, personally chaired by Director Lee Chan-jin.
Kwon Dae-young, Vice Chairman of the Financial Services Commission, emphasized at the meeting: "We regard this incident as a serious case of vulnerability and risk exposure in virtual assets."
Market Impact and User Compensation
As the Bitcoin price on Bithumb plunged due to panic selling, the broader crypto market was undergoing a sharp correction. Bitcoin briefly touched the $60,000 mark, hitting a 16-month low.
CoinGlass data shows that over 580,000 traders were liquidated globally that day, fueling widespread market panic. As of February 10, Gate platform data indicates that Bitcoin prices have rebounded to around $69,000.
Bithumb’s latest announcement confirmed that, as of 4:00 PM Saturday, user losses from "panic selling" totaled about 1 billion Korean won. The exchange pledged to fully compensate affected users and provide an additional 10% bonus.
Meanwhile, Bithumb is working to recover the mistakenly distributed assets. According to the latest disclosures, of the 620,000 Bitcoins erroneously issued, 618,212 have been recovered. After the incident, a total of 1,788 Bitcoins were sold, 93% of which have already been reclaimed.
System Flaws and Industry Implications
What’s especially shocking is that, according to Bithumb’s quarterly report, the exchange actually held only 42,600 Bitcoins as of the end of Q3 last year. This means the 620,000 Bitcoins mistakenly distributed were nearly 15 times the exchange’s actual holdings.
This fact has sparked industry concerns about the issue of "phantom Bitcoins" at cryptocurrency exchanges. If these Bitcoins did not actually exist, the transparency of the exchange’s asset reserves comes into serious question.
Bithumb has committed to a series of improvements, including enhancing the approval process for reward campaigns, adding at least two stages of approval, and strengthening abnormal transaction detection and automatic interception with AI systems.
This incident exposed significant weaknesses in internal controls and risk management, even at large cryptocurrency exchanges. A simple input error can trigger chaos on a scale of tens of billions of dollars, sending a warning signal to the entire industry.
Conclusion
As of February 10, Bitcoin prices on Gate have recovered to around $69,000, but the 125 Bitcoin gap caused by the Bithumb incident remains unresolved.
South Korean regulators have announced a comprehensive review of all domestic cryptocurrency exchanges’ internal controls, asset holdings, and operational procedures. This storm, triggered by a simple input error, may ultimately drive the industry toward stricter operational standards and regulatory frameworks.
