The South Korean exchange Bithumb starred in one of the costliest technical incidents in recent history after committing a major Bithumb error during a promotion. The exchange accidentally credited 2,000 BTC to hundreds of users instead of the small 2,000 won reward planned for the “Random Box” giveaway event.
This operational failure, representing a figure close to $142 million per user, triggered a wave of immediate sell-offs across the board. Although the irregularity was corrected in just five minutes, the phantom transaction volume was enough for Bitcoin’s price to temporarily collapse down to the $55,000 level.
User reaction following the million-dollar system failure
Upon noticing the astronomical balances in their accounts, approximately 670 customers attempted to liquidate the assets before the company could react to the issue. According to Korean financial authorities’ reports, users managed to sell nearly $2 billion in “phantom Bitcoin,” generating an unprecedented distortion in the internal order book.
Despite the chaos generated in the interface, Bithumb clarified that the transactions were recorded only in their internal ledgers without affecting the main blockchain network. Nevertheless, the internal selling pressure was so aggressive that the price on the platform dropped 22% below the global market, creating a destructive and inverse “Kimchi Premium” effect.
What are the consequences for security and customer assets?
After restoring normalcy, the company issued an official statement ensuring that the incident was not the result of an external hack or a security breach. Therefore, Bithumb insisted that customers’ pre-existing assets remain safe, although the internal control system has come under intense public scrutiny following the event.
Moreover, this event occurs in a context of extreme fragility for the crypto market, where investor sentiment has fallen to three-year lows. The speed with which mass sales were executed proves that, in the face of a systemic failure, local exchange liquidity can evaporate in just a few seconds.
Ultimately, South Korea’s financial regulator has launched an investigation to determine if there was gross negligence in the firm’s automated distribution protocols. Therefore, investors are waiting for fund recovery measures to be clarified, as Bithumb’s operational stability is vital for the regional crypto ecosystem’s health.
Looking ahead, this mistake underscores the need to implement more robust security mechanisms in large-scale exchange promotions. Thus, the industry must learn from this event to prevent simple typos from leading to million-dollar trust losses that affect the stability of local asset prices.
