In one of the most staggering operational blunders in cryptocurrency history, South Korea’s second-largest exchange, Bithumb, accidentally distributed approximately $44 billion worth of Bitcoin to its users late last week. The catastrophic "fat finger" error, which occurred during a routine promotional event on Friday, February 6, briefly triggered a massive sell-off that crashed local Bitcoin prices by nearly 17%. As regulators launch an emergency investigation today, the crypto world is left asking: how could a simple data entry mistake nearly bankrupt a major exchange in under an hour?
The $44 Billion Typo: 2,000 Won vs. 2,000 Bitcoin
The chaos began with what was supposed to be a modest marketing campaign. Bithumb had launched a "Random Box" promotion intended to reward loyal customers with small cash prizes ranging from 2,000 to 50,000 Korean won (approximately $1.40 to $35 USD). However, due to a critical input error in the exchange’s internal ledger system, the reward currency was set to Bitcoin (BTC) instead of Korean Won (KRW).
Consequently, instead of receiving a dollar or two, approximately 695 lucky—and confused—users were credited with at least 2,000 BTC each. With Bitcoin trading globally around $71,000 at the time, each user suddenly found themselves in possession of roughly $142 million in assets. The total accidental distribution amounted to 620,000 BTC, a sum vastly exceeding Bithumb's actual cold wallet reserves and theoretically valued at over $44 billion.
35 Minutes of Market Chaos
The reaction was instantaneous. Realizing the anomaly, dozens of users immediately attempted to liquidate their windfall. This sudden influx of artificial supply overwhelmed the exchange's order books. Within minutes, the price of Bitcoin on the Bithumb platform plummeted from 104 million won to as low as 81.1 million won (roughly $55,000 USD), creating a massive arbitrage gap with global markets.
"It was pure panic selling," said one Seoul-based crypto analyst. "Users knew it was a mistake and tried to cash out into Won before the exchange could lock the doors. For about half an hour, Bithumb was trading at a nearly 20% discount to the rest of the world."
Emergency Freeze and Recovery
Bithumb's internal monitoring systems flagged the "abnormal transaction volume" roughly 20 minutes into the event. By the 35-minute mark, the exchange had initiated a total freeze on all withdrawals and trading for the affected accounts, effectively trapping the erroneous funds within the platform.
In a statement released Monday morning, Bithumb confirmed that it has successfully recovered 99.7% of the mistakenly distributed assets. However, a small fraction—estimated at around 0.3% of the funds—was successfully withdrawn or traded before the freeze took effect. The exchange has pledged to cover these losses, estimated at roughly 3 billion won ($2.2 million), using corporate funds to ensure no customer assets are impacted.
Regulators Launch "Serious" Probe
While Bithumb has declared the crisis "resolved," the fallout is just beginning. South Korea’s Financial Services Commission (FSC) announced an emergency probe into the exchange's internal control systems this morning. Regulators are particularly concerned that a single human error could bypass all security checks and mint non-existent assets on the exchange's ledger.
"This incident exposes a severe vulnerability in the virtual asset sector," an FSC spokesperson told reporters. "The fact that an exchange could credit users with assets it does not physically hold highlights the dangers of internal ledger discrepancies."
Bithumb has apologized profusely, stating, "We would like to make it clear that this incident is unrelated to external hacking or security breaches." Nevertheless, the $44 billion mistake serves as a stark reminder of the fragility of digital asset infrastructure, where a single keystroke can still wreak havoc on billions of dollars in value.
