South Korea's second-largest cryptocurrency exchange, Bithumb, has found itself in a catastrophic predicament after accidentally awarding 620,000 bitcoins to qualifying customers during a promotional event. The mistake, which occurred last week, was attributed to an employee entering prize amounts in bitcoin rather than Korean won, resulting in approximately $42 billion in erroneous credits being sent to the recipients.
The error has left Bithumb scrambling to recover over $9 million of the cryptocurrency, with around 13 billion won ($40 billion) still unrecovered after some customers sold or withdrew their funds before the issue was detected. The exchange has since corrected most of the mistaken credits but acknowledges that about 86 customers took advantage of the situation and sold approximately 1,788 bitcoins in just 35 minutes.
The incident has raised concerns over "structural problems" in how cryptocurrency exchanges operate internal ledger systems, according to Lee Chan-jin, governor of South Korea's Financial Supervisory Service. Bitcoin prices have since risen, putting any customers required to return cryptocurrency at risk of losses.
Separately, legal experts are divided on whether recipients who sold their bitcoin could face criminal prosecution under Korean law, which does not currently recognize cryptocurrency as a form of property. Bithumb has taken a cautious approach, engaging in "one-on-one persuasion" talks with roughly 80 customers who cashed out and seeking to avoid civil lawsuits.
The exchange's response to the incident includes a redesign of its asset payment process and enhancement of internal control systems. In an apology, Bithumb acknowledged that the error was not due to external hacking or security breaches but emphasized that it is committed to preventing such incidents in the future. The Financial Supervisory Service has escalated its investigation, while South Korea's parliament has scheduled an emergency hearing on February 11 to question both the exchange and financial authorities.
The error has left Bithumb scrambling to recover over $9 million of the cryptocurrency, with around 13 billion won ($40 billion) still unrecovered after some customers sold or withdrew their funds before the issue was detected. The exchange has since corrected most of the mistaken credits but acknowledges that about 86 customers took advantage of the situation and sold approximately 1,788 bitcoins in just 35 minutes.
The incident has raised concerns over "structural problems" in how cryptocurrency exchanges operate internal ledger systems, according to Lee Chan-jin, governor of South Korea's Financial Supervisory Service. Bitcoin prices have since risen, putting any customers required to return cryptocurrency at risk of losses.
Separately, legal experts are divided on whether recipients who sold their bitcoin could face criminal prosecution under Korean law, which does not currently recognize cryptocurrency as a form of property. Bithumb has taken a cautious approach, engaging in "one-on-one persuasion" talks with roughly 80 customers who cashed out and seeking to avoid civil lawsuits.
The exchange's response to the incident includes a redesign of its asset payment process and enhancement of internal control systems. In an apology, Bithumb acknowledged that the error was not due to external hacking or security breaches but emphasized that it is committed to preventing such incidents in the future. The Financial Supervisory Service has escalated its investigation, while South Korea's parliament has scheduled an emergency hearing on February 11 to question both the exchange and financial authorities.
. It just goes to show that mistakes can happen even with the best systems in place. We all know what happens when we're careless or complacent - things go haywire! The moral of this story is that accountability and attention to detail are key, especially in high-pressure situations like this.
. That takes a lot of courage, but it also shows they're committed to making things right and preventing similar mistakes from happening again.
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... but at the same time i'm kinda rooting for them since they're trying to learn from their mistakes 
... it's crazy how one little mistake can cost them so much 
like, who makes such a huge error on the first try? 
and now bitcoin prices are rising... guess that means bithumb is basically in debt 
anyway, i think it's good that they're taking responsibility for their actions 
... but also kinda worried that some customers might not be held accountable 
by this whole thing... like, Bithumb is already struggling and now they go and give away like, a crazy amount of bitcoin? 
And people are selling it for a fortune before the mistake is even corrected! 
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. It's crazy to think about how quickly things escalated. I mean, 35 minutes is like, a blink of an eye in cryptocurrency time 
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. And can we talk about how bitcoin prices have skyrocketed since this whole debacle? 
It's like the value of those 620k bitcoins just went from "whoa" to "oh no".
. I mean, who needs a basic audit when you can just make a huge mistake like this? And 86 people getting away with it? That's just peachy. The fact that they're trying to convince these customers to return the bitcoin at current prices is just... lol, good luck with that 
. It's not like bitcoin prices are volatile or anything.
. I can already imagine the drama and finger-pointing that's going to go down. It's amazing how they're just glossing over the fact that Bithumb's internal systems are, you know, broken 
. Guess we'll just have to wait and see if they actually do anything about it (prob not).
. And omg, those financial authorities are getting ready for an emergency hearing... hope everything gets sorted out smoothly 
but now they gotta deal with the aftermath 
. And the fact that Bithumb didn't have a better system in place to prevent this kind of error... well, that's just basic accounting 101 
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. Get your systems right before you start handing out huge sums of money, you know?
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. It's just basic responsibility, folks!
so if you were one of those lucky winners 
It's just crazy thinking about the people who sold their coins and are now risking losses because of this 
. But, seriously, how do you even have an internal system that can mess up something so big? It's not like it's rocket science (although, now it kind of feels like it 
. what's crazy is that korean law doesn't even recognize crypto as property... so are those people who sold their btc gonna face consequences? 
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. And now the authorities are like, "Hey, we need answers!" 
. I mean, it's not surprising that there's a lot of uncertainty around this whole situation since Korean law isn't exactly clear on cryptocurrency... but still, you'd think they'd have better systems in place 
. Fingers crossed for Bithumb and the people affected by this whole debacle