Seoul, South Korea – Cryptocurrency exchange Bithumb has admitted to accidentally distributing more than Ksh 5.1 trillion worth of bitcoins to customers during a promotional event, sparking a sharp selloff on its platform.
The incident occurred on Friday, February 6, 2026, when winners of a rewards campaign were supposed to receive small cash prizes of about 2,000 Korean won (Ksh 180) each. Instead, they were mistakenly credited with at least 2,000 bitcoins apiece, according to media reports.
Swift Recovery and Apology
Bithumb said it had recovered 99.7% of the 620,000 bitcoins mistakenly distributed, worth about Ksh 5.66 trillion at current prices. Trading and withdrawals for the 695 affected customers were restricted within 35 minutes of the error.
“We sincerely apologise for the inconvenience caused to our customers due to the confusion that occurred during the distribution process of this event,” Bithumb said in a statement on Saturday.
“We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management.”
Regulatory Scrutiny
South Korea’s Financial Services Commission (FSC) and other regulators convened an emergency meeting following the incident. In a statement, they warned that the episode highlighted the vulnerabilities and risks of virtual assets.
Authorities said they would conduct an on-site inspection of Bithumb and other crypto exchanges if irregularities are found in their internal control systems, asset holdings, or operational practices.
Market Impact
Bitcoin prices on Bithumb briefly slumped 17% to 81.1 million won on Friday evening before recovering to 104.5 million won, exchange charts showed.
The incident has raised questions about operational safeguards in South Korea’s crypto sector, where Upbit remains the dominant player, with Bithumb trailing behind.
Conclusion
While Bithumb has managed to recover nearly all of the mistakenly distributed bitcoins, the incident has shaken investor confidence and drawn regulatory attention. As South Korea’s financial watchdogs prepare deeper inspections, the case underscores the urgent need for stronger internal controls and risk management in the fast-growing crypto industry.
