South Korean cryptocurrency exchange Bithumb accidentally transferred $40 billion worth of bitcoin to users on Friday, sending 2,000 bitcoins instead of $1.37 promotional rewards.
The exchange mistakenly credited 620,000 bitcoins to 695 user accounts during a Random Box giveaway event. Bithumb intended to distribute 2,000 Korean won (approximately $1.37) to winners but instead sent 2,000 bitcoins per user, according to local reports.
Bithumb detected the error within five minutes and blocked trading and withdrawals for affected accounts within 35 minutes. The exchange recovered 99.7% of the mistakenly transferred bitcoins, the company announced on Saturday.
Some recipients immediately sold the credited coins, causing bitcoin's price on Bithumb to drop 17% to 81.1 million won. The flash crash occurred only on Bithumb's internal ledger and didn't involve actual on-chain transfers.
Korean financial authorities estimate users sold over $2 billion worth of the phantom bitcoin during the brief window before Bithumb froze accounts. The exchange said it would cover all losses using company assets.
"We want to make it clear that this incident is unrelated to any external hacking or security breach,"
Bithumb stated. The company emphasized there were no problems with system security or customer asset management.
Bithumb plans to compensate affected customers by covering price differences plus a 10% bonus. The exchange estimated total losses at approximately 1 billion won.
The error occurred during bitcoin's recent downturn, which has wiped out gains from November 2024. Bitcoin had declined to around $60,000 earlier this week before rebounding to approximately $71,000.
This marks one of the largest operational errors in cryptocurrency exchange history. Bithumb said it would redesign its entire asset payment process and enhance internal controls to prevent similar incidents.
The exchange processes transactions for millions of users in South Korea, one of the world's most active cryptocurrency markets. Bithumb was founded in 2014 and ranks among the country's largest trading platforms.
