In what is being described as one of the most expensive operational errors in cryptocurrency history, South Korean exchange Bithumb accidentally distributed over 620,000 Bitcoin—valued at approximately $44 billion—to users on Saturday. The massive "fat finger" mistake, which occurred during a promotional event intended to dole out small cash rewards, triggered a 17% flash crash on the platform and forced administrators to freeze withdrawals as they scrambled to recover the funds.
The $44 Billion Typos: How the Bithumb Bitcoin Error Happened
The chaos began during a "Random Box" promotional event designed to reward users with modest prizes. According to local reports and official statements from the exchange, staff intended to distribute points or cash rewards worth roughly 2,000 Korean won (about $1.50) to lucky winners. Instead, due to a catastrophic data entry error, the system distributed 2,000 Bitcoin to nearly 700 accounts.
With Bitcoin trading near $71,000, each unintended payout was worth a staggering $142 million. In total, the exchange inadvertently credited users with approximately 620,000 BTC. To put this 44 billion Bitcoin mistake in perspective, the amount represents roughly 3% of the total circulating supply of Bitcoin, a sum that exceeds the reserves of many sovereign nations.
Flash Crash and Market Panic
The sudden influx of liquidity had immediate and volatile consequences. As shocked users realized their accounts were suddenly flush with millions of dollars in crypto, many attempted to liquidate their holdings instantly. This wave of selling pressure caused a dramatic Bithumb flash crash, driving the price of Bitcoin on the exchange down by over 17% to around 81 million won, significantly below the global market rate.
The price anomaly created a rare "reverse Kimchi premium," where Bitcoin on the South Korean exchange traded at a deep discount compared to international platforms like Binance and Coinbase. "I couldn't believe my eyes," one user wrote on a local forum. "I saw trillions of won in my account and my hands started shaking."
The Freeze: Bithumb BTC Recovery Efforts
Bithumb's security systems quickly flagged the abnormal transaction volumes. Within approximately 35 minutes of the erroneous distribution, the exchange implemented an emergency Bitcoin withdrawal freeze and restricted trading for the 695 affected accounts. This swift action likely prevented a complete solvency crisis for the exchange.
99.7% of Funds Recovered
In a statement released Saturday, Bithumb announced that it had successfully recovered 99.7% of the accidentally distributed assets. "We sincerely apologize for the inconvenience caused to our customers due to the confusion," the company said, clarifying that the incident was strictly an internal operational failure and not related to any external hacking or security breach.
Despite the high recovery rate, the crypto exchange blunder was not without cost. Reports indicate that about 1,788 BTC were sold before the freeze, with the exchange managing to claw back 93% of those specific funds. Approximately 125 BTC—worth nearly $9 million—remains unaccounted for or tied up in complex withdrawal chains, though Bithumb has stated it will cover any losses with its own reserves.
Regulatory Scrutiny and Industry Impact
This incident comes at a sensitive time for South Korean crypto news. Bithumb was already under observation by the Korea Fair Trade Commission (KFTC) regarding its advertising practices. The sheer scale of this error has prompted immediate on-site inspections by the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS).
Analysts warn that such events highlight the fragility of centralized exchange operations. While the Bithumb BTC recovery was largely successful, the event serves as a stark reminder of the risks inherent in digital asset management. For now, regular trading has resumed, but the shock of the $44 billion mistake will likely resonate in the market for weeks to come.
