In an unprecedented event that briefly rattled the global cryptocurrency market, South Korean exchange Bithumb accidentally distributed approximately 620,000 Bitcoin (BTC)—valued at a staggering $44 billion—to users on Friday, February 6, 2026. The massive distribution, caused by a clerical "fat finger" error during a promotional event, triggered a localized 17% flash crash on the platform and forced the exchange into a frantic 35-minute scramble to freeze withdrawals and recover the funds.

The Multi-Billion Dollar Typo: How 2,000 Won Became 2,000 BTC

The incident originated from a promotional "Random Box" event intended to reward users with small cash prizes. According to internal reports, Bithumb staff meant to distribute rewards of approximately 2,000 Korean Won (roughly $1.40) to eligible participants. However, in a catastrophic data entry error, the reward unit was set to "Bitcoin" instead of "Won."

As a result, hundreds of users who opened their promotional boxes were shocked to find 2,000 BTC credited to their accounts—a windfall worth roughly $140 million per person at current market rates. In total, the exchange erroneously distributed 620,000 BTC, a figure representing nearly 3% of the total circulating Bitcoin supply.

Panic Selling and a 17% Flash Crash

The market reaction was instantaneous. Realizing the anomaly, several users immediately attempted to liquidate their unexpected holdings. This sudden influx of sell orders on Bithumb flooded the order book, causing the price of Bitcoin on the exchange to plummet.

While global Bitcoin prices remained relatively stable around $71,000, the BTC/KRW pair on Bithumb crashed by 17%, briefly touching 81.1 million Won (approximately $58,000). The arbitrage gap created a frenzy as automated bots and traders tried to capitalize on the discrepancy, further straining the exchange's matching engine.

The 35-Minute Freeze

Bithumb's risk management systems flagged the abnormal outflow within minutes. The exchange officially suspended all deposits and withdrawals at 7:35 PM KST, approximately 35 minutes after the erroneous distribution began. This rapid response likely saved the exchange from insolvency, preventing the vast majority of the phantom Bitcoin from leaving the platform.

Recovery Efforts and Regulatory Scrutiny

In a statement released on Saturday, Bithumb confirmed that it had successfully recovered 99.7% of the erroneously distributed funds. Because the "fat finger" coins were largely internal ledger entries rather than on-chain transfers, the exchange was able to reverse most of the transactions.

However, reports indicate that approximately 125 BTC (worth nearly $9 million) may have been successfully withdrawn or sold before the freeze, leaving the exchange to cover the loss from its own reserves. Bithumb has assured the public that customer assets remain safe and that the incident was "unrelated to external hacking or security breaches."

Despite the successful recovery, the incident has drawn the ire of South Korean regulators. The Financial Services Commission (FSC) has announced an emergency probe into Bithumb's internal controls. Authorities are particularly concerned about how a single data entry error could authorize the distribution of assets exceeding the exchange's total reserves.

Crypto Exchange Security Risks in 2026

This incident serves as a stark reminder of the operational risks inherent in centralized cryptocurrency exchanges. While much of the industry's focus is on external security threats like hacking, internal control failures remain a critical vulnerability. The Bithumb Bitcoin error highlights the need for stricter "maker-checker" protocols, where large transactions or distributions require multiple levels of approval.

For investors, the event underscores the volatility of local markets and the importance of not keeping excessive funds on exchanges. While Bithumb's solvency appears intact, the reputational damage may take significantly longer to repair.