Mistaken credits briefly sent bitcoin prices plunging on Korea's No. 2 crypto exchange
Bithumb, South Korea’s second-largest cryptocurrency exchange by trading volume, was thrust into crisis over the weekend after a staff error led to the creation of 620,000 so-called “ghost bitcoins” on its internal ledger — an amount equivalent to nearly 3 percent of the total global bitcoin supply.
The incident occurred at around 7 p.m. Friday, when Bithumb mistakenly distributed 620,000 bitcoins to hundreds of users during a promotional event.
The error stemmed from an employee entering the reward unit as bitcoin instead of Korean won, turning what was meant to be a 620,000-won marketing campaign into a mishap amounting to 60.5 trillion won. At the time of the incident, bitcoin was trading at 97.64 million won.
Bithumb said it detected the mistake within 20 minutes and froze the concerned accounts by 7:40 p.m. However, before controls were fully in place, some recipients sold the mistakenly credited bitcoins on the platform.
This triggered a sharp, localized plunge in bitcoin prices on Bithumb of up to 18 percent, briefly pushing prices into the low 80 million won range — more than 10 percent below prices on other domestic exchanges. The broader bitcoin market was unaffected, as Korea’s bitcoin trading is largely segregated from the international market due to won-based trading.
The exchange said market prices normalized within minutes and that 99.7 percent of the misallocated bitcoins — about 618,212 coins — were recovered the same day. Still, around 1,788 bitcoins were sold during the window, of which roughly 125 coins have yet to be retrieved.
Industry estimates put the amount of funds actually withdrawn at about 3 billion won. Considering that banks typically request the return of mistakenly transferred funds and file a lawsuit for unjust enrichment if the request is refused, the case could potentially evolve into a legal dispute.
While no new bitcoins were minted on the blockchain itself, the scale of the internal error has sparked controversy over balance manipulation. According to Bithumb’s latest disclosure, the exchange held just 175 bitcoins on its own balance sheet, while customer-deposited bitcoins totaled about 42,600 — far short of the 620,000 units mistakenly credited.
Industry sources explained that the incident was possible because crypto exchanges operate largely through internal ledgers, where balances are updated on accounting without on-chain settlement. As a result, exchanges can temporarily reflect asset balances far exceeding their actual holdings.
Critics likened the incident to “a bank issuing forged checks without cash in the vault.” Comparisons have also been drawn to the 2018 Samsung Securities “ghost stock” case, though analysts note a key difference: Unlike stock trading linked to an external settlement system linked to the Korea Exchange and Korea Securities Depository, Bithumb was able to nullify most of the erroneous credits internally without broader market consequences.
Bithumb rejected allegations of balance manipulation, saying the amount of coins held in its wallets is kept “100 percent identical” to balances displayed on customers’ screens under strict accounting controls.
The exchange said it would compensate users who sold bitcoins at depressed prices at 110 percent of their losses, provide 20,000 won in compensation to all users who accessed the platform during the incident, and waive trading fees on all listed assets for a week. Any unrecovered bitcoins will be replenished using the company’s own capital, it added.
Financial authorities — including the Financial Services Commission, the Financial Intelligence Unit and the Financial Supervisory Service — have launched on-site inspections. If violations are confirmed, regulators may pursue a formal investigation and impose sanctions, including a suspension of business operations.
The incident has reignited broader concerns over trust in crypto exchanges and the gap between actual asset custody and internal accounting — a structural vulnerability now firmly back in the spotlight.
By Im Eun-byel (silverstar@heraldcorp.com)
