Crypto markets are known for their speed, size, and surprises. But even in this fast-moving world, what happened at a South Korean crypto exchange shocked many people. A simple mistake turned into a $40 billion problem almost instantly.
The company involved is Bithumb, one of South Korea’s largest cryptocurrency exchanges. The firm planned to give customers a small reward as part of a routine promotion. Each user was supposed to receive 2,000 won, which is worth about $1. Instead of sending cash, the system mistakenly sent 2,000 bitcoins to each affected customer. At current prices, that error added up to more than $40 billion worth of bitcoin.
For a short moment, 695 customers suddenly became extremely wealthy on paper. However, the excitement did not last long. Bithumb detected the error within 35 minutes and quickly stepped in. The company froze trading and withdrawals for the affected accounts to stop the situation from getting worse.
According to Bithumb, about 620,000 bitcoins were sent out by mistake. The exchange later said it had recovered 99.7% of the coins, meaning only a very small portion could not be immediately returned. The company also made it clear that the issue was not caused by hackers or a cyberattack. Instead, it was an internal system error.
Bithumb publicly apologized and tried to reassure users. The company said customer funds were not at risk and that its security systems were still strong. To make up for the disruption, Bithumb announced compensation for users who were active at the time. These customers will receive 20,000 won, which is about $13, and the exchange will temporarily waive trading fees. The company also promised to upgrade its systems, including using artificial intelligence to detect unusual transactions before they happen.
The incident quickly caught the attention of South Korea’s financial authorities. The Financial Supervisory Service held an emergency meeting and said it would review the situation. If any illegal activity is found, a formal investigation will follow. Bithumb has said it will fully cooperate with regulators.
This event has restarted debates about regulation in both crypto and traditional finance. While crypto is often seen as risky, mistakes like this are not limited to digital assets. In 2024, a major U.S. bank accidentally credited $81 trillion to a customer due to human error before reversing the transaction.
The lesson is simple. Technology can move money fast, but even small mistakes can create massive consequences. As crypto continues to grow, stronger controls and better safeguards will be just as important as innovation.
Other crypto entities like Canaan Inc. (NASDAQ: CAN) would do well to pick up lessons from what happened to the Korean exchange and strengthen their systems so that errors don’t result in reputational losses or financial losses.
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