A South Korean cryptocurrency exchange, Bithumb, experienced a significant blunder when it accidentally distributed over $40 billion (£32 billion) worth of Bitcoin to its customers. The firm initially intended to reward its users with a small cash incentive of 2,000 won (approximately $1.37), but due to an error, the customers instead received 2,000 bitcoins.
The incident occurred on a recent Friday, and the platform quickly moved to rectify the situation, recovering nearly all of the missing tokens. Bithumb informed that trading and withdrawals were restricted for the 695 customers affected within 35 minutes of the glitch.
According to reports, 99.7% of the mistakenly sent 620,000 Bitcoins were retrieved by the exchange. Bithumb reassured its users that the matter had nothing to do with external hacking or security breaches, emphasizing that there were no problems with system security or asset management.
In an emergency meeting, South Korea's financial regulators announced an immediate investigation into the incident, with the Financial Supervisory Service (FSS) indicating that any signs of illegal activity would lead to a formal inquiry. Bithumb's CEO, Lee Jae-won, pledged to cooperate with regulators and to change company practices, reinforcing a commitment to 'customer trust and peace of mind' over rapid growth.
To compensate for the error, Bithumb plans to pay all customers who were using the platform at the time 20,000 won ($13.66) and waive trading fees. The company also announced plans to enhance its verification systems and incorporate AI technology to detect unusual transactions.
This incident is expected to ignite discussions regarding the need for stricter regulatory controls over financial transactions, echoing similar mistakes made by financial institutions in the past.
In a related event, in April 2024, Citigroup mistakenly credited $81 trillion, instead of $280, to a customer's account, which was rectified within hours of the error being detected.
