- Bithumb is contacting users who withdrew or sold billions in mistakenly-credited Bitcoin to negotiate its return, after an internal error led to a monumental payment miscalculation.
- Legal experts say civil recovery is likely, as unjust-enrichment law strongly favors the exchange, but criminal liability for users would be difficult to prove.
- The incident has intensified scrutiny of internal controls at Korean exchanges, with regulators signaling tighter ownership and oversight rules ahead.
- Bithumb’s CEO confirmed 99.7% of the overpaid Bitcoin has been recovered, with the company covering the remaining shortfall and offering a compensation package to affected users.
South Korean cryptocurrency exchange Bithumb is now negotiating with customers to recover billions in Bitcoin mistakenly sent during a promotional error on December 6, according to a report from state media. The company is focusing on users who “disposed of it immediately” after the exchange credited promotional rewards in Bitcoin instead of Korean won, leading to roughly $43 billion in erroneous distributions. Consequently, this massive administrative blunder has drawn legal and regulatory scrutiny over recovery and liability.
Lawyers note that the exchange’s strongest path is civil recovery under unjust-enrichment law, as there was no contract promising such enormous rewards. However, prosecutors are expected to be cautious about criminal charges, as the incident stemmed from an internal error rather than fraud, “and any viable charge would have to turn on clear evidence that particular recipients knew or ought to have known they were exploiting an obvious glitch,” explained lawyer Joshua Chu. Meanwhile, the episode exposes concerning gaps in the oversight of Korean crypto exchanges’ internal control systems.
Researcher Siwon Huh noted these exchanges operate under a patchwork of standards and “are not under the direct oversight of financial regulators due to ambiguities in regulatory jurisdiction.” Consequently, regulators are now moving to tighten rules, including potential caps on major shareholders’ stakes, citing inadequate internal controls. The incident is accelerating efforts to strengthen provisions in the upcoming second phase of the nation’s Virtual Asset User Protection Act.
On February 5, Bithumb CEO Lee Jae-won announced a compensation plan for affected users. The plan includes payments and a trading fee waiver, with Lee confirming 99.7% of the overpaid Bitcoin has been recovered. The company used its own funds to cover the remaining shortfall from the costly operational mistake.
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