South Korean cryptocurrency exchange Bithumb today announced that it will fully compensate customers affected by an incident in which 620,000 Bitcoins worth more than $40 billion were accidentally distributed to 695 users during event reward payments.
The error occurred on February 6th, and resulted in a huge overpayment due to an input error during reward processing. Bithumb said it detected the issue within 20 minutes and blocked all transactions and withdrawals.
Bithumb recovered almost all of the overpaid Bitcoins, amounting to 618,212 BTC, representing 99.7% of the total amount. Furthermore, 93% of the assets already sold by recipients were recovered and no coins were sent outside the platform.
Bithumb CEO Lee Jae-won said in a statement, “We sincerely apologize for the confusion and inconvenience caused to our customers due to the overpayment incident.” “We feel deep responsibility for failing to protect the stability and integrity of crypto asset exchanges, which are our top priorities.”
Bithumb confirmed that customer losses due to panic sales during the incident totaled approximately 1 billion Korean won (more than $680,000) as of February 7. The company plans to pay 110% compensation to customers who sold at an unfavorable price on Friday.
All customers who accessed the platform during the incident will receive 20,000 won ($15) and transaction fees will be waived for seven days.
The exchange also announced the establishment of a permanent customer protection fund worth 100 billion Korean won ($68 million) to deal with future incidents.
The Financial Supervisory Service and the Financial Services Commission are investigating Bithumb following this mistake.
The company said it is working with regulators after reporting the issue to authorities and will implement system upgrades, including enhanced asset verification, multi-step payment approvals, and AI-powered safeguards for 24-hour abnormal transaction detection.
