South Korea's second-largest cryptocurrency exchange confirmed an internal error on February 6 that mistakenly credited hundreds of users with 2,000 Bitcoin (BTC) each during a promotional payout.
Staff intended to distribute 2,000 Korean won - approximately $1.50 - but accidentally selected Bitcoin instead. The error triggered concentrated selling that drove Bitcoin down roughly 16% on Bithumb within minutes.
The glitch occurred during a "lucky box event" promotional distribution. Recipients who discovered the unexpected balances immediately began liquidating the Bitcoin.
Trading data shows concentrated selling overwhelmed Bithumb's order book between 19:30 and 19:51 UTC, pushing the BTC/KRW pair from approximately 97 million won down to 81 million won.
What Happened
Bithumb's internal control systems detected the abnormal transactions and restricted affected accounts. The exchange's statement emphasized no external hacking or security breach occurred.
Market prices stabilized within five minutes according to Bithumb, though the flash crash created what crypto analysts termed a "reverse Kimchi premium" - Korean prices falling below global levels rather than trading at the typical premium.
The price dislocation remained isolated to Bithumb's platform. Other major exchanges including Binance and Coinbase showed no similar drops, as the selling pressure stayed confined to Bithumb's order book. The exchange confirmed all customer assets remain secure and trading operations continued normally throughout the incident.
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Why It Matters
The operational failure adds pressure to Bithumb amid existing regulatory scrutiny. South Korea's Fair Trade Commission is currently investigating the exchange over potentially misleading marketing claims about liquidity.
A separate probe examines a failed promotional campaign that left over 30,000 users without promised rewards.
Bithumb maintains approximately 2.42 million monthly active users and handles hundreds of millions in daily trading volume.
The exchange trails only Upbit in the South Korean market.
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