South Korea Investigates Bithumb After $43 Billion Bitcoin Error

TLDR

Table of Contents

Bithumb sent 620,000 BTC by mistake, worth over $43 billion, due to a unit entry error.
The exchange has recovered 99.7% of the mistaken bitcoin after the incident.
South Korea’s FSS has upgraded a routine review of Bithumb to a full investigation.
Bithumb held only 46,000 BTC at the time it sent 620,000 BTC to users.

South Korea’s financial regulator has launched a full-scale investigation into Bithumb following a major operational error involving $43 billion worth of bitcoin. The incident has raised concerns over the exchange’s internal controls and its ability to manage user funds securely.

Mistaken Transfer Triggers Regulatory Action

The Financial Supervisory Service (FSS) of South Korea has opened a full investigation into Bithumb after the exchange mistakenly transferred about 620,000 bitcoin, worth approximately $43.1 billion, to user accounts. The error occurred on February 6 during a promotional event, when a staff member reportedly entered the reward unit as BTC instead of Korean won.

Authorities initially planned a routine inspection, but the scale of the error led them to expand their review. An FSS official told Yonhap News that the agency is conducting the investigation with “utmost seriousness” and will apply strict measures if needed.

GM Legends ☕️
A technical error at South Korea’s crypto exchange Bithumb mistakenly credited users with about 620,000 BTC (~$40B).
Some sold immediately, causing market disruption. Authorities recovered roughly 99.7% of the coins, and sold balances must be legally returned.… pic.twitter.com/MsnzPOx2fW
— LionTV (@LionTV_crypto) February 9, 2026

The incident has placed renewed pressure on digital asset exchanges to tighten their internal controls. Bithumb has confirmed that it held only 46,000 BTC at the time of the incident, raising questions about how such a large transaction was possible.

Recovery and Compensation Efforts by Bithumb

Bithumb announced that it had managed to recover 99.7% of the mistakenly distributed bitcoin and reclaimed 93% of the 1,788 BTC that users sold during the price drop. The remaining unrecovered bitcoin amounts to around 125 BTC.

The exchange has promised to compensate affected users at 110% of their losses. It has also pledged to create a user protection fund worth 100 billion won (around $68 million) to handle any future issues. Bithumb plans to improve its internal systems to prevent further incidents.

Despite quick recovery efforts, the error caused the bitcoin-KRW trading pair to drop by roughly 15% on Bithumb’s platform, affecting many users and raising questions about market stability.

Political and Industry Responses

Political figures have expressed concern about the reliability of crypto exchanges. Na Kyung-won, a lawmaker from the People Power Party, said, “If an exchange operates by merely shifting numbers on an internal ledger without actual on-chain movements, it means they could be selling bitcoin they don’t even own.”

The party’s spokesperson, Choi Bo-yoon, described the operational performance of South Korea’s exchanges as having reached a “failing grade.” The ruling Democratic Party also criticized the event, calling for stronger internal control measures across the industry.

In response, the government is considering new policies, including limiting individual ownership stakes in exchanges to between 15% and 20%. This measure had been debated earlier but now has renewed support from lawmakers.

Ongoing Discussions on Regulatory Reform

The error has added urgency to ongoing discussions about the Digital Asset Basic Act, South Korea’s upcoming crypto legislation. Lawmakers now say that the act should include rules giving crypto exchanges legal responsibilities similar to banks and financial institutions.

Officials are also reviewing whether exchanges should be forced to conduct more transactions on-chain to ensure transparency and better monitoring. The incident is expected to influence both regulatory approaches and the public’s trust in digital asset platforms.

The full investigation by the FSS is ongoing. More regulatory actions may follow depending on the findings.